Make a budget, for God’s sake

Why and how to create and manage a small business (or household) budget.

Want to set your new or young business up for failure? Want to add stress to your life? Want to scramble when an opportunity presents itself, then miss out? OK. Don’t worry about a budget.

Want to organize a map to business success? Want to enjoy confidently making choices and smart changes? Want to keep your lights on? Please, make a budget for God’s sake.


An acquaintance asked me to help her and her husband set up QuickBooks for their new business. A couple married for about 10 years, they had both left their jobs and hung out a shingle as local service-providers, offering various non-essential services and a few products. They definitely had a talent for what they were offering and experience in the field. During the set up interview I asked them if they had a budget yet and if we needed to work on it. “We don’t need a budget,” they said. “God will provide.” I asked them how they were going to set sales goals, monitor overhead and avoid over-spending. They said it would all work out, they weren’t going to stress about it, they were just going to get started working. I set up the QuickBooks file and accounts, got them going with it and wished them luck. Their business lasted about 14 months.

A budget lays out your income goals. How much money do you anticipate bringing in?
A budget forces you to understand what expenses you’ll have.
A budget tells you if you will have enough left over at the end of the month to pay yourself. Profit is a beautiful thing!

A budget is NOT meant to be a best case scenario. And a budget isn’t “finished” when you have entered all of the categories and numbers. That is just the beginning. Budgets are fluid and active and reciprocal.

A Budget should be a realistic plan of what is possible, probable and desirable.

You need a budget because no matter how much you think you already know, no matter your experience and no matter how much you feel you can count on God, you cannot predict the future. Better to have just a little control over it.

“Beware of little expenses. A small leak will sink a great ship.” — Benjamin Franklin
The answer to “why” is simply to avoid discovering financial pitfalls too late.


If you are starting a business or have a young business, you may not know how to be a business owner, but you know your trade and you know your industry. You know best what the income and expense categories should be, with a few exceptions. Once you have decided on what system to use (pen & paper, Excel, QuickBooks…) start with a simple list. What are my income and expense line items? An interior design firm might make this list:


  • Principal Services
  • Assistant Services
  • Delivery Services
  • Accessory Sales
  • Outsourced services (painters, wallpaper installers, etc)


  • Advertising
  • Auto Expenses / Fuel
  • Cell Phone and Internet Service
  • Continuing Education
  • Insurance
  • Meals & Entertainment
  • Office Supplies
  • Payroll and payroll taxes
  • Printing & Reproduction
  • Rent (office space)

From there, you will begin to fill in estimates.

If you charge $200/hour for principal time, $100/hour for assistant time and $50/hour delivery time, just do a little fun math. How many hours do you think you’ll be able to bill out per month?

You would like to run one ad in a local home interiors magazine, so research cost and fill in accordingly. You know your geographic customer base so do some calculating and come up with fuel and auto related expenses. Go down the list…for some you can find concrete numbers and for others you will be making an educated but not necessarily an exact estimate. That’s OK — help from peers and people like me, followed by monthly analysis will fine tune your budget.

Pluses and minuses.

The basis of a budget is money in and money out. Total up the money you have estimated earning. This is your gross income. Total up your expenses. This is your total expense. Subtract expenses from income. That’s your net income (hopefully a positive number…a profit).

Again, this is a budget in it’s simplest form, but for most new and young small businesses this is an appropriate starting place. Don’t over complicate, and if you feel like you don’t understand what you are looking at, get help from a good bookkeeper or accountant. Contracting a few hours with someone who can help you brainstorm and point out red-flags will go a long way.

Don’t let budgeting intimidate you or cause stress. If you have a hard time thinking in terms of dollars and profitability, get someone to work through it with you.

The answer to “how” is ‘one step at a time’.

Budget Management

Budgeting and budget management are part of being in balance. You need a budget to balance your expectations and your life. Once you have created your initial budget, interact with it regularly.

You have created a budget that includes estimated income.

Often times people only look at their budgets to analyse costs. But income can and will play an important roll in budget management.

If you surpass your estimated income, you need to decide what to do with the additional profit. This may seem like a non-problem, but it is not uncommon for a business to have a peek, increase overhead without calculation, then get into trouble when the peek ends and the overhead increase does not. Surpassing your income expectation is a good thing! But it is still something that needs to be managed via your budget. On the flip side, if your income falls short, you need to realize and adjust sooner rather than later. An income drop can be managed and overcome. And it can be reversed or balanced via expenses. But not if you don’t realize it’s happening.

You have created a budget that includes estimated expenses.

Temptations arise. A great advertising opportunity. Used equipment that has suddenly come up for sale. A discount on a vacation. Speed-bumps also arise. Your computer dies. Gas prices skyrocket. Airfare is more than expected. Temptations and speed-bumps are part of doing business. Realizing them when it is too late does not need to be a part of doing business.

Review your budget monthly or quarterly. Frequency may depend on how comfortable your cash balances are — if you have a sizable cushion, you can handle a few speed-bumps, if you are extremely tight you can’t. It is best to review more often, and pare back if you are comfortable. It is NOT best to review your budget any less than quarterly. Let it become a part of your normal process.

So, how does this review process look?

  • The first step is to have your data entry up-do-date(*).
  • Run or prepare a report showing your income and expenses for the period you are reviewing. These are your ‘actual’ numbers.
  • Compare your budget numbers to the “actual” numbers. Review each line item to find it you were over, under or on budget.
  • Make purposeful decisions about changes. By purposeful I mean make changes only with a goal in mind. “My income was higher than estimated. I’d like to spend more for advertising, so I’ll raise that number but I think I can reduce office expenses”. Likewise, identify areas that you need to be more discipline in. As you make adjustments you can watch your bottom line. Does your profit still feel good and right?

Budgets should be used for overall business operations, smaller business projects and even family households.

Use this same model to budget a specific project. Maybe you are the owner of a yoga studio and you decide to expand to include Pilates. Make a budget showing what income you feel you can generate and what expense you will incur just for this part of your business. Include any initial one-time expenses like equipment so you know how long it will take to cover those opening items. Maintain your bookkeeping as always, but expand to include these new categories. Now you can estimate profit potential for Pilates, and compare to actual numbers once you are underway. Maybe Pilates will be incredibly profitable so you’ll expand further. Maybe you’ll learn that yoga is much more profitable and that’s where you should focus. Either way, you are budgeting, balancing and planning from a place of information and intention.

In the end, budgeting your money is as important as maintaining your own good health. Don’t spend your nights tossing and turning with worry over cash-flow. Don’t let your enthusiasm, love and joy for your work be doused by stress over your finances. Don’t just count on a awesome outcome — make it happen.

(*) The first step is to have your data entry up-do-date: Watch for future articles that will include simple steps for healthy bookkeeping entry and financial reporting.

I am Rachel Tawil Kenyon. I am a bookkeeper and small-business ally, and I live a balanced life. Click on my profile for articles about living a balanced existence at work and at home.

Please ❤ my article so more people will find it! I hope your home and your business are filled with balance and profits!

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