nobody asked | approaching operational budgets

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Recently, I've explored fermentation and kombucha-making, seeking non-alcoholic beverage alternatives. My curiosity quickly turned into action: within a week of my first kombucha batch, I created a brand, printed labels, wrote a business plan, and outlined an operating budget. I couldn't resist diving into the details of the potential of turning this hobby into a business.

To make the most of this energy and process, I decided to share my journey. This way, I can illustrate the questions and steps I take for both my clients and myself. If you are interested in this full series, please check out the related posts.

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Once you've clarified your goals and outlined your business model, it’s time to translate that vision into numbers. This is the part that most people dread (which is why I started with the fun part), but it is so important to understanding the feasibility of your business. Developing an operating budget is where your idea becomes tangible—a critical step that helps you plan for sustainability, communicate your strategy, and make confident decisions as you grow.

A start-up operating budget isn’t just a spreadsheet. It’s a financial roadmap that:

• Clarifies how much money you need to start and run your business

• Helps prioritize where to allocate resources for maximum impact

• Identifies your break-even point and timeline for profitability while informing your pricing

• Keeps you accountable and aligned with your long-term goals

• Builds trust with investors, partners, and financial institutions, if you are engaging outside resources

It is easy to feel lost in the numbers, but writing out your budget can help start the process and fill in the blanks. Start by outlining your costs and the assumptions behind your profit. It is important to avoid writing a budget fairy tale–you want to have as close to a real number as possible, which requires research. The market research conducted during the business planning process is a great starting point, but other important questions you should consider are:

• What does your revenue model look like? (Subscriptions, services, products?)

• What are your fixed vs. variable expenses?

  • Consider your start-up costs (technology, tools, photography, production, inventory, insurance, etc)

• How many customers do you expect in the first 3, 6, or 12 months?

  • Outlining your cash flow will help you prioritize your business development

• What are your customer acquisition costs?

  • Audience acquisition is essential to the success of your business 

  • Taking a look at your marketing calendar through the lens of holidays and events will help you maximize your reach

• Will you have employees or contractors right away?

  • Don’t forget that your labor is not free

  • Think through any strategic partnerships that might help reach mutual goals while reducing resources

Outlining these assumptions allows you to test them later and iterate as you gather real-world data.

What to Include in Your Operating Budget

Some of the main components to include in your start-up operating budget are:

Startup Costs

• Licenses, permits, legal, and accounting fees

• Equipment, software, and initial inventory

• Branding, website, and marketing launch

• Savings–plan for at least three months of your total operating costs in savings by either building this into your monthly budget or starting with this reserve in your investment or funding documentation

  • Example: $500 for LLC registration, $1,200 for logo design and website buildout, $750 for inventory

Fixed Monthly Costs

• Rent, utilities, insurance

• Salaries, benefits, and contractor fees

• Subscriptions and software tools

  • Example: $1,500 for coworking space, $300 for business insurance, $150 for tools like Canva and Google Workspace

    
    

Variable Costs

• Marketing and advertising spend

• Product or service delivery costs

• Transaction or payment processing fees

  • Example: $500 in monthly digital ads, 2.9% Stripe processing fees per transaction

Revenue Forecasts

• Projected monthly sales by category or service line

• Assumptions around pricing and volume

• Grants and awards

Cash Flow Projection

• When do you expect money to come in vs. go out?

• Will you need bridge funding or credit to manage gaps?

  • Example: Delay between rent expense and sales revenue in Month 2

There are plenty of tools that can help you. Take a look at a few resources I have found helpful:

• SBA’s Business Budget Template: A free, reliable resource for structuring your budget

• Airtable Small Business Budget: A free-to-use, well-managed budget with an easy-to-use budget tracker

Iterate Often, Especially Early On

Like your business plan, your budget should evolve as you learn what works (and what doesn’t). Set up recurring tasks to review your budget, categorize your expenses, and update your forecasts based on actual performance.

Your operating budget is more than just a tool for tracking expenses—it’s a way to stay intentional with your resources, growth plan, and build a financially sound business, from day one. By combining data and strategic forecasting, you’ll set yourself up to make smart, informed decisions as your venture grows.

If you would like help drafting any of these resources for your business or a general vibe check on what you’ve started, please send me a note to schedule time to chat!