Calculating Stripe fees for customer payments is easy with our calculator. Enter the payment amount to calculate Stripe's transaction fees and what you should charge to receive the full amount.
Calculate how much you’ll pay in Square fees for online, in-person, and manually-entered payments.
Enter your loan information to get an estimated breakdown of how much you'll pay over the lifetime of your loan.
PayPal fees can be confusing. Our calculator helps you understand how much you’ll pay in fees for common transaction methods.
teering your business toward growth isn't just about having a great idea—it's about effective budgeting. A comprehensive budget is your financial compass, guiding your decisions and helping you plan for future growth. It's more than tracking income and expenses. It includes setting financial goals, forecasting possible hurdles, and finding opportunities.
A detailed budget empowers you to manage your finances wisely, foresee potential pitfalls, and promote sustainable expansion. This guide covers everything you need to know about creating a budget for a small business.
Assessing financial goals and needs
Defining what you want to achieve financially will determine the course of your business decisions. Start by asking yourself: What does financial success look like for my business?
It could be increasing profit margins, expanding into new markets, or reducing operating expenses. Your answer will shape your financial objectives and set the tone for your budgeting efforts.
Your financial priorities should also align with your business strategy. If you aim to grow your customer base, for instance, then your budget should reflect investment in marketing and customer engagement activities.
Your revenue targets and expense categories are the pillars of your budget. Identify your primary sources of income, and aim for realistic yet ambitious targets. Project your sales revenue for the upcoming period, considering factors like market trends and past performance.
You should also categorize your expenses into fixed and variable categories. Fixed expenses, like rent or salaries, remain constant, while variable expenses change with your business operations, such as raw materials or advertising costs.
Gathering financial information
Once you’ve determined your financial goals and needs, you need to gather the financial information necessary to build a robust budget. This process starts with collecting historical financial data—a critical step that offers valuable insights into your business's past performance.
You'll want to review your previous years' financial statements, paying close attention to your income and expenses. This information provides a clear picture of your revenue streams and expense categories, helping you understand which areas of your business are the most profitable and which cost the most. Some common business expenses include:
- Advertising
- Rent (a storefront, an office space, or a co-working space)
- Independent contractor services
- Subscriptions to software or website hosting
- Goods or raw materials (for product-based businesses)
Next, estimate your upcoming revenue and expenses. Use your historical data as a baseline and factor in any changes you anticipate in the business environment. Are there new competitors or regulatory changes on the horizon? Is your industry growing or contracting? All these elements can significantly impact your future financials.
When estimating, strike a balance between being realistic and ambitious. Be careful not to underestimate expenses or overestimate income, which could lead to overspending and financial strain. By accurately projecting your future revenue and expenses, you will create a budget that guides your business toward financial success.
Creating a budget plan
Having assessed your financial goals and gathered all the necessary information, it's time to roll up your sleeves and create your budget plan. Begin by developing a comprehensive budget template. Think of this as a financial blueprint designed to guide your business toward its monetary targets.
The budget template should clearly outline your income sources and expense categories. Keep it detailed yet easy to understand. Include line items for each revenue stream and expense type, and keep track of the data periodically, whether weekly, monthly, or quarterly.
Now comes the task of allocating funds to different expense categories. This is where your financial objectives and priorities play a pivotal role. Suppose your goal is to expand your business. In that case, you might allocate a substantial portion of your funds to marketing or research and development. Alternatively, if cost reduction is your priority, you may allocate more resources to improve operational efficiency.
In the budgeting process, a dollar saved is a dollar earned. Therefore, scrutinize each expense category and ask yourself: Is this the best use of my funds? Could I achieve the same result with less expenditure? Always explore alternatives before allocating your hard-earned money.
Monitoring and controlling expenses
Once you've created your budget plan, you’ll need to continuously monitor and control your expenses—a key to ensuring your small business stays on the path to financial success.
Regularly reviewing and adjusting your budget is essential. As you operate your business, you'll encounter discrepancies between your budgeted and actual figures. These discrepancies are not cause for panic; instead, they serve as valuable feedback. They help you understand how accurately you've forecasted and where you may need to adjust your budget or operations. Using a business banking solution such as Novo can help you easily stay on top of your business expenses and income.
But monitoring alone isn't enough. You must also take action to control your expenses, such as implementing cost-saving measures and efficiencies. For example, you might renegotiate contracts with suppliers, reduce energy consumption, or invest in technology that improves productivity.
Every cost-saving measure you implement should align with your business goals. Cutting costs should not compromise the quality of your goods or services or the value of your business. You're not just reducing expenses—you're enhancing your business's efficiency and sustainability.
Forecasting and cash flow management
Using your current financial information and your expectations for future business performance, you can make informed predictions about your future income and expenses. This isn't about exact figures. It's about creating an educated estimate that can help you plan for the months and years ahead.
Forecasting is your chance to prepare for tomorrow today. It allows you to anticipate potential financial challenges and devise strategies to overcome them. Whether it's a slow sales period or an unexpected expenditure, forecasting prepares you for these bumps in the road.
You should also use forecasts to predict periods of high cash flow and plan how best to use these windfalls. Should you invest in new equipment? Hire additional staff? Save for a rainy day? Your forecast can help you answer these questions.
(Need a tool to help you manage your cash flow? Novo Reserves lets you decide what percentage of your funds you want to put into a reserve and allocate that amount from each deposit automatically. Sign up for a free Novo account today.)
Cash flow management goes hand in hand with forecasting. Closely monitoring the money flowing in and out of your business ensures you’ll have sufficient funds to cover your expenses. Good cash flow management can mean the difference between a thriving business and one struggling to keep the lights on.
Forecasting and cash flow management provide a roadmap for your small business's financial future. They enable you to anticipate and prepare for potential financial challenges, ensuring your business remains financially healthy. Keep one eye on the present and the other on the future, and you'll navigate your business toward continued success.
Reviewing and analyzing budget performance
You want to make sure that your budget goal is on par with your estimated budget. If that’s the case, great! Otherwise, you’ll need to balance your budget so that it is realistic. This side-by-side analysis will highlight variances and help you understand whether your business is on track to meet its financial goals. Are your revenues hitting their targets? Are expenses staying within limits? Answers to these questions will guide your future business decisions.
Through this comparison, you'll also identify areas of improvement. Perhaps your marketing expenditure exceeded the budget, indicating a need for more cost-effective strategies. Or maybe your revenues fell short, suggesting the need to enhance your sales efforts. Every variance between your budget and actual results offers an opportunity to learn and improve.
The review process also uncovers opportunities for your business. For instance, if your profit margins are higher than expected, you might be able to invest more in growth initiatives. If your operational costs are lower than budgeted, you could explore investing in better equipment or hiring additional staff.
Reviewing and analyzing your budget performance isn't a one-off exercise. It's an ongoing process that helps you adapt your budget and business strategies to ever-changing market conditions.
Budgeting for growth and investments
As your business flourishes, you'll want to consider budgeting for growth and investments. This means allocating funds for expansion and new initiatives to propel your business to new heights.
Consider where you want to expand or what new initiatives you plan to undertake. This could be anything from launching a new product line to opening another store location or investing in cutting-edge technology. Once you've outlined these plans, allocate a portion of your budget to these growth initiatives. Keep these allocations realistic yet bold, aligning with your overall financial objectives.
You should also evaluate the return on investment (ROI) for these budget decisions by comparing the financial benefits your investments yield against the costs of those investments.
For each growth initiative or investment, determine if it’s yielding the returns you expected. If not, what changes can you make to improve its performance? Answering these questions will help you maximize your investments.
As with all aspects of budgeting, evaluating ROI isn't a one-and-done task. It's a continuous process that requires regular review and adjustment. By regularly assessing your ROI, you can adapt your investment strategy as needed and ensure your business grows sustainably.
The takeaway
Novo’s business banking tools can help you take charge of your budget, keep your financial plans on track, and drive your small business toward its financial goals. Ultimately, maintaining a budget goes beyond monitoring your income and expenses. It's about taking control of your financial future, anticipating potential challenges, and creating new opportunities. A well-crafted budget will set you on the path toward stability and growth.
So, whether you're a new entrepreneur or a seasoned business owner, let budgeting be your roadmap to success. Start planning, stay disciplined, and watch your business thrive.
Novo Platform Inc. strives to provide accurate information but cannot guarantee that this content is correct, complete, or up-to-date. This page is for informational purposes only and is not financial or legal advice nor an endorsement of any third-party products or services. All products and services are presented without warranty. Novo Platform Inc. does not provide any financial or legal advice, and you should consult your own financial, legal, or tax advisors.
Novo is a fintech, not a bank. Banking services provided by Middlesex Federal Savings, F.A.: Member FDIC.
All-in-one money management
Take your business to new heights with faster cash flow and clear financial insights —all with a free Novo account. Apply in 10 minutes.
