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5 Tips for Creating a Business Budget (+ FREE Budget Template Download)

4-minute read

Kristin Vegh

Kristin Vegh

9 May 2024

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Running a small business? Looking for basic bookkeeping templates? Hoping to whip your budget into shape? Our free budget template might have what you need!

Tracking your finances can feel overwhelming. While it might be tempting to bring in professional help, the cost of an accountant for small businesses can be prohibitive.

So if you’re looking to skip the small business accountant fees, this free business budget template from Simply Business® might be a good place to start.

FREE Customizable Business Budget Template

Click below to download our editable PDF budget template.


What is a Business Budget and Why You Need One

Whether you’re trying to hit sales goals or manage your cash flow, maintaining a budget is essential for business owners. Creating a business budget involves estimating how much you expect to earn and spend in a given month, quarter, or year, and measuring it against what you actually end up earning and spending in that time.

Why is comparing your expected and actual income so important? It may seem like a lot of work, but creating and keeping a budget have some real benefits.

  1. It makes it easier to track the progress of business goals
  2. It can shed light on operational costs and sales trends
  3. It could help identify areas where your spending could be improved

And that’s just the tip of the iceberg. As a business owner, it’s unlikely you’ll ever regret keeping your finances organized. Your business can’t continue to grow without healthy revenue. A budget can help you maximize that revenue by making it easier to control business spend, management of resources, and emergency funds.

So this begs the question: How do you make a business budget? Before we get into budgeting and bookkeeping tips for small businesses, let’s review some important terms you should know.

Budget Basics

Budget vs. actual.

This is an important distinction. Our budget template has two columns where you can input your sums: “budget” and “actual.” The “budget” column is where you put your estimated expenses and earnings. The “actual” column is where you fill in what you ended up earning and spending.

Fixed expenses.

A fixed expense is a payment that is typically the same every month, such as a car payment, rent, or an insurance premium. While your revenue and emergency expenses will vary month-to-month, your fixed expenses will likely be the most consistent part of your budget, as they don’t typically change.

Variable expenses.

These figures will be less consistent. The variable expenses in your budget change month to month, based on any number of circumstances. Common variable expenses for businesses can include utility bills, repairs, and office supplies.


This one is more straightforward, but far from consistent. Revenue is how much money you bring in, which usually comprises income from sales, donations, or investments. Without sufficient revenue, you may not be able to cover your fixed and variable expenses.

Net income.

This is where it all comes together. Your net income is essentially the amount of money you “take home” after you subtract your expenses from your revenue. Basically, when all your monthly transactions are done, this is your remaining profit.

These terms are just a basic introduction to budgeting, but should help you get started. Now let’s explore some budgeting and bookkeeping tips for small businesses.

5 Budgeting and Bookkeeping Tips for Small Businesses

1. Separate personal and business finances.

You’ve probably heard you’re never supposed to mix business and pleasure. This goes for finances as well. Running a business — especially starting one — can be costly. Make sure you’re recording all of your business expenses to keep yourself organized and avoid budgeting confusion down the road.

2. List the numbers you know.

Your first step in creating a budget should be listing out all of the costs and earnings that are fixed. These might include items like rent, insurance, and recurring donations. Because they’re consistent, fixed expenses and income streams are the foundational building blocks of your budget. They’ll give you an idea of how much you’ll need to earn in order to make ends meet and have enough left over for contingencies.

3. Be realistic with your estimations.

Income and variable expenses can be unpredictable. Your best bet is to overestimate your expenses and underestimate your earnings. Think of the old adage: hope for the best, but prepare for the worst. While there are no guarantees, with modest expectations, there’s a better chance of outperforming your forecasts and having revenue to spare. Which brings me to my next point…

4. Save for emergencies.

One of the most important budgeting and bookkeeping tips for small businesses is to save for a rainy day. An emergency cash reserve is an essential lifeline for an independent business. If you’re faced with an unexpected cost, you’ll be glad you set some of your profits aside. You can incorporate savings into your budget. Consider the money you set aside each month as an expense. This will help keep you accountable for building your savings.

5. Get help if you need it.

It’s important to remember: If you encounter issues keeping your own budget or you simply don’t have the bandwidth for it, it might be time to hire extra help. Hiring a bookkeeper for a small business might be a good option for you. Small business budgeting software could also be a helpful tool.

Business Insurance: Protecting Your Bottom Line

Business spend management and maintaining a budget can help ensure you’re able to save up for emergencies. But this isn’t the only way to protect your business in the event of disasters.

Running a business can be unpredictable. Business insurance can help you be prepared for things that come up unexpectedly. Some policy options include:

  • GENERAL LIABILITY: Typically covers third-party bodily injury and third-party property damage occurring during the normal course of business, as well as personal and advertising claims, product liability, and more.
  • WORKERS’ COMPENSATION: Generally covers medical and rehabilitation costs resulting from an employee’s work-related injuries or illness.
  • BUSINESS OWNER’S POLICY: A policy combining general liability, commercial property, business interruption, and can include a variety of optional add-ons.

Simply Business makes finding commercial insurance easy — in fact, it’s our specialty. We work with some of the most trusted names in the insurance industry to bring business owners like you choice and value. Our free quote comparison tool allows you to explore policy options and compare prices, all in just a few minutes. It’s that simple.

Start your free quote online today and see how Simply Business can help you find the coverage your business needs.

Get Insured in Under 10 Minutes

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Looking for additional free financial management tools? Check out our other small business accounting templates and resources:

You also can find more small business accounting tips using our guide to small business cash flow management. For more about business insurance, entrepreneurship tips, and industry news, visit our Resource Center.

Kristin Vegh

Written by

Kristin Vegh

After several years of working in insurance while also freelance writing, I've finally found where the two interests intersect. I'm a writer with Simply Business with an insurance processing background and a love of research.

Kristin writes on a number of topics such as small business trends, license reciprocity, and BOP insurance.

This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer

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