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The Young Entrepreneur’s Guide to Business Budgeting

Budgeting. Even some adults still have trouble doing it right. How is a young entrepreneur like you – still a teen and starting your very first business – supposed to learn this valuable skill?

For business leaders, budgeting is more than keeping track of the money you have, the money you spend, and the money you make. There’s both an art and a science to budgeting for business (and life in general). All you need to do now is get the hang of the basics.


Let’s say your startup business is fashion photography. A business budget must include:

  • How much money you need to buy your tools, including a camera, backgrounds, a lightbox, and professional editing software
  • How much money you will charge for your services, including travel time, set-up time, and break-down time
  • How much of the money you receive will need to go back into the business (for example, if you’re renting studio space or pay a monthly cost for your editing software) and how much is pure profit


The best time for young entrepreneurs to create a business budget is at the planning stage. As you create your timeline and goals, it’s smart to come up with your budget, as well.

Your budget should include important information that includes whether you need startup, or seed, money, how much, and how you plan to get it.


Fixed costs” include anything you know you’ll be paying each month once your business is up and running. For larger companies, fixed costs include the rent for office space plus the utilities to keep the lights on and Wi-Fi working, employee salaries, and the cost of producing their materials. Fixed costs do not change. No matter how much you sell, your fixed costs will always be there.

Young entrepreneurs such as yourself may not have a lot of fixed costs. You probably don’t need to rent the entire floor of an office building and you likely already have access to reliable Wi-Fi thanks to your parents or school library. But there may be other fixed costs you need to add up:

  • Website hosting
  • Fuel costs if you drive yourself to your jobs
  • The price of materials to create your items
  • Public transportation passes if you use that to get around

As you prepare your business budget, remember to keep track of every cent you spend that will come up each month.


Now that you know what your fixed expenses will be, let’s talk briefly about variable costs. Fixed costs are the ones you can count on paying no matter what. Variable costs will change over time. Variable costs include one-time expenses, such as purchasing a domain name or buying your camera and equipment. Remember to factor these into your business budget, too!

The rest of your variable expenses will include things such as marketing, hiring others if you need help (such as a professional graphic designer to create your logo), and packaging and shipping charges if you are mailing a product to customers.

A good way to figure out your variable costs is to add up all your one-time expenses to get started, then add up how much it will cost to print flyers or business cards to post around your neighborhood or to ship a handful of products across the country.


No one can predict the future. But the smartest and most successful young entrepreneurs have a small pile of cash saved up for so-called “rainy days.” What if:

  • No one pays for your services for the first two months you’re up and running?
  • There’s another global emergency?
  • You get sick and can’t work for several weeks?

As we said, you may not be able to predict emergencies that will arise and stop you from doing business. But you can count on there being emergencies of some type. Be smart and include one month’s worth of your expenses in your business budget.


Once you’re up and running, there should (hopefully!) be some money flowing in. Part of your business budget is to track every penny that comes back to you through your business. The money that comes in should be spent in this order:

  1. Fixed expenses
  2. Variable expenses
  3. Personal profit (aka net profit)


Let’s go back to your fashion photography business and add up the costs of your first business month so we can determine your profit:

Fixed costs:

  • Website hosting = $10/month
  • Bus pass = $30/month
  • Professional editing software = $7/month
  • Total fixed costs = $47/month

Variable costs:

  • One-time expenses, such as a lightbox and domain name: $50
  • 500 business cards to hand out to clothing stores, dry cleaners, and tailors near you: $35
  • Total variable costs before you get started: $85

Emergency fund: $100

Total spent to get up and running: $232


  • One-hour photo session, including travel time, set-up, and breakdown: $70
  • Multiplied by 2 customers your first month: $140

This means that in your first month you can expect to lose $92. But that’s ok because some of that was from one-time expenses. You probably won’t need to buy more business cards for a while, and once you have your studio equipment, you’ll only need to worry about upkeep or replacing them.

That means that by your second month, your profits and losses should look more like:

Fixed costs: $47
Variable expenses: $0
Income from 2 new clients: $140
Net profit = $93!

Of course, this is very oversimplified. Each of your expenses will be different depending on what you do and how much you need to get started. Babysitting, for example, will have few, if any, fixed costs or variable expenses and will therefore be almost pure profit.

The important takeaway here is that it’s crucial for your career as a new young entrepreneur to keep track of every penny that goes both into and out of your business. No matter how little it may be, in the long run, it adds up to a lot. Hopefully, that’ll be a lot of profit for you!

Are you a Florida-based young entrepreneur looking for a college scholarship? Click here to learn more about how the Kantner Foundation can help you!

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