Small Business Budget Template for Next Year (Simple Google Sheets Version)

Updated 2026-10-30 · AI Agent Starter Kit

A budget is just a plan for where the money will come from and where it will go over the next 12 months. Most small business owners skip it because it sounds like an accountant's job. But a one-tab budget in Google Sheets takes an afternoon, and it answers the questions you actually care about: can I afford that hire, what do I need to bring in each month, and how much should I set aside for taxes.

November and December are a good time to build next year's budget. You have most of this year's numbers, and January is close enough to plan for. This guide covers what a small business budget includes, how to build each section from real numbers, a copy-paste Google Sheets layout with formulas, a monthly budget vs actual check, an illustrative example and the mistakes that make budgets useless.

This is a planning tool, not tax or accounting advice. Check tax set-asides and anything about your books with an accountant.

Budget vs forecast vs plan

These three get mixed up. They work best together.

The plan sets goals, the budget turns them into monthly money, and the forecast checks that the timing works.

What a small business budget includes

Keep it to these sections. More detail than this usually means you stop updating it.

Step 1: Start from this year's real numbers

Pull the last 12 months (or as many as you have) from your accounting tool or bank statements. You need monthly totals, not every transaction. If you don't use accounting software, a bank statement export sorted by payee gets you most of the way.

Mark anything that won't repeat: a one-off equipment purchase, a big client who has left, a slow month you were on leave. Those distort next year's numbers if you copy them across.

Step 2: Build income from how you actually win work

Don't start with a revenue goal and work forward. Start with how work arrives. For a service business, income is roughly:

Leads per month x close rate x average job value = income per month

Use your own numbers for each. If you don't know your close rate, the close rate calculator and the guide on how to calculate close rate show how to work it out from a few months of leads and won jobs. For recurring clients (retainers, maintenance plans, memberships), list them separately as a fixed monthly line, then add new work on top.

Build three versions of income: expected, cautious (lower), and good (higher). Budget your spending against the cautious one.

Step 3: Split costs into fixed and variable

Fixed costs stay the same each month. Variable costs move with how much work you do. The split tells you what you must cover even in a slow month.

While you're listing software, check each subscription. If nobody used it last month, it's a candidate to cancel.

Step 4: Pay yourself on purpose

Many owners take whatever is left. Budget your own pay as a line, the same as any other cost. If the budget can't cover a pay you could live on, that's important information, and it's better to see it in November than in July.

Step 5: Add set-asides

Set-asides are money you move out of the operating account so it isn't accidentally spent:

• Taxes. Ask your accountant what percentage to set aside and how often to pay. Don't guess.
• Equipment and replacement. Laptops, vans, tools wear out on a schedule. Spread the cost across the months.
• Cash buffer. Pick a number of months of fixed costs you want in reserve and build toward it.

The budget template (copy and paste into Google Sheets)

Set up one tab called Budget. Column A holds labels, columns B to M hold January to December, column N holds the year total.

Row 1:  Line                  | Jan | Feb | ... | Dec | Year
Row 2:  INCOME
Row 3:  Recurring clients     |     |     |     |     | =SUM(B3:M3)
Row 4:  New work: leads       |     |     |     |     |
Row 5:  New work: close rate  |     |     |     |     |
Row 6:  New work: avg job $   |     |     |     |     |
Row 7:  New work income       | =B4*B5*B6 (copy across) | =SUM(B7:M7)
Row 8:  Other income          |     |     |     |     | =SUM(B8:M8)
Row 9:  TOTAL INCOME          | =B3+B7+B8 (copy across) | =SUM(B9:M9)
Row 10: DIRECT COSTS
Row 11: Materials             |     |     |     |     | =SUM(B11:M11)
Row 12: Subcontractors        |     |     |     |     | =SUM(B12:M12)
Row 13: Payment fees          | =B9*[your fee rate] (copy across) | =SUM(B13:M13)
Row 14: GROSS PROFIT          | =B9-SUM(B11:B13) | =SUM(B14:M14)
Row 15: FIXED COSTS
Row 16: Rent                  |     |     |     |     | =SUM(B16:M16)
Row 17: Software              |     |     |     |     | =SUM(B17:M17)
Row 18: Insurance             |     |     |     |     | =SUM(B18:M18)
Row 19: Phone and internet    |     |     |     |     | =SUM(B19:M19)
Row 20: Other fixed           |     |     |     |     | =SUM(B20:M20)
Row 21: PEOPLE
Row 22: Owner pay             |     |     |     |     | =SUM(B22:M22)
Row 23: Wages and contractors |     |     |     |     | =SUM(B23:M23)
Row 24: SET-ASIDES
Row 25: Tax set-aside         | =B14*[rate from accountant] | =SUM(B25:M25)
Row 26: Equipment fund        |     |     |     |     | =SUM(B26:M26)
Row 27: Buffer                |     |     |     |     | =SUM(B27:M27)
Row 28: TOTAL OUT             | =SUM(B11:B13)+SUM(B16:B20)+SUM(B22:B23)+SUM(B25:B27)
Row 29: LEFT OVER             | =B9-B28 (copy across) | =SUM(B29:M29)

Enter the close rate in row 5 as a decimal or percentage (for example 0.3 or 30%). Replace the bracketed rates with your own numbers. Add a second tab called Actual with the same layout, so you can compare the two every month.

The monthly budget vs actual check (20 minutes)

Once a month, after your books are up to date, fill in last month's actuals and look at three rows:

BUDGET VS ACTUAL: [month]

Total income:   budget ____   actual ____   difference ____
Total out:      budget ____   actual ____   difference ____
Left over:      budget ____   actual ____   difference ____

Biggest surprise (line and why): ______
Leads this month vs budget: ____ vs ____
Close rate this month vs budget: ____ vs ____
One change for next month: ______

A difference formula on the Actual tab makes this quick: in a third tab, =Actual!B9-Budget!B9 shows how far income was above or below plan. When income misses, the lead and close rate lines tell you whether the problem was fewer inquiries or fewer wins, and those need different fixes.

The month-end checklist has a slot for this check.

An illustrative example

This example uses made-up numbers to show the method, not a real result. A one-person interior painting business looks back at the year. It had about 12 inquiries a month, won about 4 of them (a close rate of roughly a third) and had a fairly steady average job size. Two of the year's best months came from one large commercial job that won't repeat, so the owner leaves it out.

The cautious income line uses 10 inquiries a month, the same close rate and the same average job. Winter months get lower lead numbers because that's what the last year showed. Fixed costs are small (insurance, phone, software, van payment), materials run at a share of each job, and the owner adds an equipment fund for a sprayer and ladders and a tax set-aside at the rate the accountant suggested.

The budget shows January and February leave almost nothing over, so the owner moves the planned equipment purchase to spring and books two interior jobs for January in December. The monthly check in March shows leads on budget but a lower close rate, which points at slow quote follow-up rather than marketing.

Common mistakes

• Starting from the revenue you want. Build income from leads, close rate and job size, then compare it to the goal.
• Copying last year's one-offs. Remove anything that won't repeat.
• No owner pay line. If you don't budget your pay, the budget looks healthier than it is.
• Budgeting against the good case. Spend against the cautious income line.
• Guessing the tax set-aside. Ask an accountant.
• Building it and never opening it again. The monthly check is where the budget earns its keep.
• Too many lines. If you need a lookup to find a row, merge some lines.

Using AI here (numbers come from you)

AI can help you sort a bank export into categories, suggest which costs are fixed or variable, or turn your notes into a short budget summary. It should not supply numbers. Keep these rules:

• Every number comes from your records. If the AI writes "your average job is about..." without your data, delete it.
• Formulas, not AI, do the math. Let Google Sheets add things up.
• No tax or legal answers. Treat anything the AI says about tax rates as a question for your accountant.
• Check categories. AI often guesses wrong on payees with vague names. Skim the result before trusting it.

Get the lead side of your budget each week

Two lines in this budget (leads per month and close rate) are the ones most owners can't fill in without digging. The Weekly CEO Report Kit is an n8n workflow that runs every Monday at 7 AM. It reads your lead sheet and Gmail (and, if you connect it, Google Calendar), counts new leads, first replies, won and lost leads, stuck leads and overdue emails with code rather than AI, has AI write a short plain-English summary, strips out any number the AI made up, saves a one-page report to your Gmail Drafts and logs a row to a Weekly tab. Those weekly counts give you the leads and won jobs you need for the budget vs actual check. To be clear about what it doesn't do: it doesn't build your budget, read your bank, accounting tool or invoices, track expenses or revenue, or give tax advice. Nothing sends without you. Get the kit

Want the leads and inbox handled too? The Solo Ops Command Center bundle adds Speed-to-Lead, which logs every new inquiry to a Google Sheet and drafts first replies and follow-ups that stop when the person answers, and Inbox Chief of Staff, which sorts your Gmail and drafts replies in your voice, plus a dashboard sheet that charts the weekly trend. It isn't bookkeeping software. Get the bundle

Related: how to fire a client politely (when one client costs more than the budget says they earn).

More guides

• n8n Cloud vs Self-Hosted: Which Should a Small Business Choose?
• Lead Source Tracking for Small Businesses: How to Know Where Your Customers Come From
• How to Set Weekly Goals as a Small Business Owner (With a Simple Template)
• How to Respond to an Introduction Email: 7 Templates for Small Business Owners
• How to Fire a Client Politely (Email Templates for Ending a Client Relationship)
• Follow-Up Email After a Networking Event: 7 Templates and a 48-Hour Plan for Small Business Owners
• Customer Communication Plan for a Small Business (Free Template)
• Sales Pipeline Stages for Small Business (6 Stages, Simple Definitions)
• Month-End Checklist for Small Business Owners (Copy-Paste, 60 Minutes)
• Invoice Email Template: How to Send an Invoice by Email (With Examples)