Planning
An annual budget that tracks against actuals.
Twelve months of planned spend by category, with variance columns so the plan is still useful in June.
Twelve months of planned spend by category, with variance columns so the plan is still useful in June.
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Startup operating budget
Excel (.xlsx) · 2 tabs · 12 months · no email required
What is in the file
The reason most startup budgets stop being used by month four is that nobody built anywhere to put the actuals. A budget with no variance column is a document you wrote in January and a prediction you can never be wrong about, which is the same as being useless.
This one has three columns per month: what you planned, what happened, and the gap. Filling in the middle column takes about twenty minutes after each close.
Salary and the costs attached to it are usually 60 to 75 percent of a startup's spend, so the headcount tab is where the budget is really decided. Everything else is rounding by comparison.
Enter each role with a start month rather than assuming everyone is there from January. Two engineers starting in April instead of January is roughly $60,000 of difference on a $120,000 salary — more than most companies' entire annual software spend, and a decision that gets made by accident when the budget does not model timing.
Load salaries by 10 to 15 percent for the employer taxes and benefits that sit on top of them. A plan built on base salary alone understates the true cost by about a month and a half of payroll across a year.
A variance is information, not a verdict. The useful question is which of three things happened:
Most founders treat all three the same way and end up either re-forecasting every month, which destroys the plan's value as a commitment, or defending a plan that is visibly wrong. Sorting variances into those three buckets first makes the monthly review take fifteen minutes.
The runway line at the bottom takes opening cash, subtracts cumulative net burn and reports the months remaining. It is the number your board will ask for and the only one in the file that should change your behaviour.
Raising takes three to six months from the first meeting to money in the bank. That means the decision to start raising happens at roughly twelve months of runway, not at six — by six months, the round is already being negotiated from a weak position and every investor can see it.
Keep the original budget frozen and add a re-forecast column each quarter. Monthly re-forecasting means the plan always agrees with reality, which sounds good and makes it impossible to learn anything — you never find out how wrong you were, because the target moved every time it was about to be tested.