Budget

A plan expressed in money. Useful as a decision, useless as a wish.

What it means

A budget sets expected income and expenditure for a period, usually by month, against which actual performance is compared.

Why it matters

Building one forces decisions to be made in advance rather than reactively, and it gives everything else — hiring, pricing, investment — a reference point.

What it looks like in practice

Build it bottom-up from what you actually expect, then sense-check the total. A budget built top-down from a growth target is a wish with columns.

What to watch out for

A budget nobody revisits. And a budget so optimistic that missing it is normal, which teaches everyone to ignore it.

Where to get proper advice

Your accountant. This is exactly the kind of question they answer in ten minutes and most owners never ask.