Budgeting and forecasting for founders
A budget is your plan for the year. A forecast is your updated estimate as the year unfolds. Founders who use both can see early when reality is drifting from the plan.
A simple budget
Start with revenue assumptions, direct costs and the main expense lines: people, software, marketing, rent. Keep categories aligned with your books so comparisons are easy.
A rolling forecast
Each month, replace past months with actuals and update the remaining months. A 12-month rolling forecast keeps a year of visibility at all times.
Budget versus actual
Each month, compare actual results to budget and forecast. Focus on the few lines with the largest differences and note why. This review is where most of the value comes from.
What to check
- Budget categories match your books
- Forecast updated monthly
- Monthly budget-versus-actual review
- Who owns each assumption
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Frequently asked questions
Is a forecast useful for a very early company?
Yes, even a simple one. It helps you understand how decisions such as hiring change runway.
Is this founder finance guide advice?
No. Sam's List writes these guides for education. They describe common questions and processes, not advice for your specific situation.
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