When preparing your business budget, there are a few common errors business owners often make.

First - don’t overthink it. Your budget is a guide; it’s not a blueprint for building a house.

The biggest mistake is not doing a budget at all. A close second is creating a budget simply because it’s what you think you’re “supposed” to do as a business owner. Going through the motions won’t guide your business. Your budget isn’t there to restrict you—it’s there to keep you on track so you can achieve the success you want.

Your budget should be achievable. That means around 50% is attainable. You don’t want it to be too easy to meet, but you also don’t want it to be so hard that it feels out of reach. The goal needs to be ambitious enough to keep you motivated.

You don’t need to account for every single expense—again, your budget is a guide. Look at last year’s expenses to get a rough idea of what to allow for. Don’t make it too rigid—you need some flexibility. What you expect to happen now might look very different in six months. (We all saw how COVID-19 affected budgets.)

The most important aspect of any budget is to review and update it as the year progresses.



Opportunities may present themselves throughout the year, and you need to be flexible enough to revise your budget to accommodate them.