What should a small business budget include?

A complete small business budget should include all revenue sources, fixed expenses (rent, insurance, loan payments, subscriptions), variable expenses (cost of goods sold, labor, marketing), owner's draw or salary, and a savings/reserve allocation. Most financial advisors recommend keeping 3–6 months of operating expenses in reserve and allocating at least 5–10% of revenue to savings when possible.

What is a healthy expense ratio for a small business?

Healthy expense ratios vary by industry, but as a general guide: COGS should be 30–50% for product businesses (lower for services), labor 20–35%, and all fixed overhead under 20% of revenue. Your total expenses should leave at least 10–20% net margin. If expenses consistently exceed 85–90% of revenue, the business has a margin problem that pricing or cost cuts must address.

How do I calculate my monthly business surplus or deficit?

Monthly surplus = Total monthly revenue − Total monthly expenses (fixed + variable + owner draw). A surplus means you have money left to reinvest, build reserves, or distribute as profit. A deficit means expenses exceed revenue — which is normal in early months but unsustainable long-term. Track this monthly and compare to prior months to spot trends.

SmartBizCalc

Monthly Business Budget Calculator

Enter your revenue, fixed costs, variable expenses, and owner draw to see your monthly surplus or deficit and where your money is going.

Revenue

Monthly Revenue ($)

Fixed Monthly Expenses

Rent / Mortgage ($)

Insurance ($)

Loan Payments ($)

Software / Subscriptions ($)

Other Fixed Expenses ($)

Variable Expenses (% of revenue)

Cost of Goods / Services (%)

Labor / Wages (%)

Marketing / Ads (%)

Other Variable (%)

Owner

Owner Draw / Salary ($)

Monthly Budget Summary

Monthly Revenue—

Total Fixed Expenses—

Total Variable Expenses—

Owner Draw—

Total Expenses—

Bottom Line

Monthly Surplus / Deficit—

Total Expense Ratio—

Net Margin—

Annual Surplus Projection—

Estimates based on inputs provided. Variable expenses scale with revenue — adjust percentages to match your actual business. Review your budget monthly.

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You might also find useful: Cash Flow Calculator · Profit Margin Calculator · Break-Even Calculator