The ADHD Entrepreneur: Business Budgeting
Chances are you’ve heard that a budget for your business in important, but let’s be real—just the word “budget” can create a reaction in you that makes you want to run for the hills! The word budget can often be aligned with the words restrictive, boring, and NO! But here’s the thing: budgeting is about clarity and freedom, not restriction in your business and in your personal life. A budget for your business helps you create clear income goals and build out your overall financial strategy. And when an ADHD entrepreneur has a clear income goal, they can be dangerous AF! A clear plan for your business spending can help you make better decisions, reduce stress, and keep your financial situation under control. So, let’s break it down in a way that actually makes sense and feels doable.
Why a Budget is Important for Your Business
Before we dive into the how-to, let’s talk a little more about why budgeting is so crucial.
1. It Gives You a Clear Picture of Your Finances: Without a budget, it’s like driving in the dark without headlights. You might know where you want to go, but you have no idea if you’re on the right road. A budget lights the way, showing you exactly where your money is going. This clarity can be a huge relief, especially if money stresses you out.
2. It Helps You Make Informed Decisions: Can you invest in ABC or XYZ? When you have a budget, you can make decisions based on facts rather than guesswork. Your budget will tell you where you stand with your business spending. Thinking about hiring someone? Your budget can help you figure out if you can afford it. Without this information, you might end up making decisions that hurt your business in the long run.
3. It Keeps You Accountable: Let’s be real: Staying on track with your finances can be tough! especially when ADHD makes it easy to get sidetracked or impulsively buy another course that is finally going to transform your marketing. 😬 A budget acts like a friendly reminder, nudging you to stick to your financial plan. It’s not about restricting you—it’s about keeping you aligned with your goals.
4. It Reduces Financial Anxiety: Worrying about money can be a huge source of anxiety, and if you have ADHD, that anxiety can feel even more overwhelming and often lead to avoidance. A budget helps you feel more in control because you know what’s coming in, what’s going out, and what you have left. That kind of clarity can slash your stress levels.
How to Build a Budget for Your Business
Okay, now that I’ve got you on board that a budget for your business is important (I have, right? 🤞🏻), let’s talk about the how.
1. Start with Your Income
First things first: you need to know how much money your business is bringing in. This includes all your revenue streams—whether it’s sales, services, or other sources of income. Make a list of all your income sources and write down the average amount you make from each one per month.
If your income is inconsistent (which is often the case for entrepreneurs), it’s a good idea to base your budget on the lower end of what you typically earn or take a step back and look at your income for a longer period of time.
2. List Your Fixed Expenses
Fixed expenses are the costs that stay the same each month, like rent, utilities, internet, and software subscriptions. These are the non-negotiables that you have to pay no matter what. Make a list of all your fixed expenses and write down how much each one costs per month.
3. List Your Variable Expenses
Variable expenses are the costs that can change from month to month, like supplies, marketing, travel, and payroll. These are the expenses that you have more control over. Again, make a list and estimate how much you typically spend on each one per month.
It’s important to be realistic here. If you know you tend to spend a bit more on certain things (like eating out while travelling for work), account for that in your budget. The goal is to create a budget that reflects your actual spending habits, not an idealized version of them.
Again, if your expenses vary month to month, or seasonally, it’s a good idea to look at a larger chunk of time for reviewing your expenses. My preference is to look at most things based on an annual timeline and then break it down to monthly from there.
4. Build Tax Savings Into Your Plan
I know, I know, we don’t want to think about taxes but, not building them into your plans will come back to bite you, and we don’t want that! If you aren’t sure how much to save, start by setting aside 25% to 30% of your income for taxes. This might seem like a lot, but it’s better to overestimate than to find yourself scrambling for cash when it’s time to pay up. If you’re also collecting sales tax, bump that % up a little to reflect your sales taxes.
To get a more detailed idea of how much you should be saving for taxes and to see your big financial picture through a business and a personal budget, grab my free resources (videos and a budget template).
5. Don’t Forget About Savings
Saving money might not be at the top of your priority list, but it’s an important part of a healthy budget, both on the personal and business side. Savings in your business can help you when you need to make a larger investment or have a slow period and still need to cover your regular business expenses.
Start small by putting aside a small percentage of your income each month, and increase the % as you are able to over time.
6. Compare Your Income to Your Expenses
Now, it’s time to compare your total income to your total expenses. If your expenses are higher than your income, you’ll need to make some adjustments. Look at both your fixed and variable expenses and see where you can cut back. Nothing is off the table when it comes to getting things to balance!
If your income is higher than your expenses, you’re in a good position to start thinking about how to allocate that extra money, whether it’s investing in your business, paying down debt, or boosting your savings.
How Often Should You Review Your Budget?
Creating a budget is the first step. The key to making your budget work for you is to review it regularly because things are always changing.
1. Why Regular Reviews Are Important
Life—and business—change all the time. Maybe you land a big client, or maybe your expenses go up because of inflation. Regularly reviewing your budget ensures that it stays relevant and reflects your current financial situation. It also helps you catch any potential issues before they become big problems.
2. Monthly Reviews
This is when you’ll compare your actual income and expenses to your budgeted amounts. Are you staying within your budget? Did you spend more or less than you planned? A monthly review gives you the chance to make adjustments as needed.
Having a bookkeeping system can be a big help with this. If bookkeeping is something you avoid at all costs, consider adding some help in this area to your budget because the feedback knowing your number month to month can give you is worth the investment. A bookkeeper should update you regularly when each month is completed and even send you regular reports.
3. Quarterly Reviews
A more in-depth review every quarter is a great idea. This is when you’ll take a step back and look at the bigger picture. How is your business doing overall? Are you on track to meet your financial goals? Are there any trends in your income or expenses that you need to address?
A quarterly review is also a good time to reassess your budget and make any necessary changes. Maybe you need to adjust your spending in certain areas or set new financial goals for the next quarter.
4. Annual Reviews
A comprehensive review at the end of each year is essential. This is when you’ll evaluate your overall financial performance, assess how well you stuck to your budget, and set goals for the upcoming year. It’s also a good time to review your tax situation and make sure you’re prepared for the next tax season.
Making Your Budget ADHD-Friendly
Now that you know how to build and review a budget, let’s talk about how to make it ADHD-friendly. Here are a few tips to help you stay on track:
1. Keep It Simple
The more complicated your budget is, the less likely you are to stick to it. Keep things as simple as possible. Use a spreadsheet, bookkeeping system, or a budgeting app that’s easy to navigate. Focus on the essentials—income, fixed expenses, variable expenses, taxes, and savings.
2. Set Reminders
If you struggle to remember to review your business finances, set up reminders on your phone or calendar. A quick monthly check-in can help you stay on track. If you have a bookkeeper, a quick monthly check-in can also help you stay on track.
3. Automate/Systematize Where You Can
Automation and clear systems are always your money friend, and it’s no different with your business finances. Consider setting up automatic transfers to your savings account, automating bill payments, and using a bookkeeping system that syncs with your business bank accounts. Or have a clear system to know exactly what % of your business income is for what purpose, and have a regular frequency of when you will distribute your income. The less you have to think about it, the easier it will be to stick to your plans.
4. Don’t Go It Alone If You Feel Overwhelmed
If it all feels overwhelming, don’t be afraid to ask for help. Whether it’s working with a financial coach (hey 👋), using an accountability partner, or joining a support group for ADHD entrepreneurs. Having a support system can make a huge difference and can help you get to a place where you are confident in your systems as fast as possible!
Embrace the Power of a Budget 🤑
Budgeting might not be the most exciting part of running a business (yet 😊), but it’s one of the most important. By creating a plan that works for you and reviewing it regularly, you can gain control over your finances, reduce stress, and set your business up for long-term success.
A clear plan can also lead to increased revenue in your business because we can often hold ourselves back income-wise when we don’t have confidence in how we are managing our money!
