What the calculator is actually computing

This budget planner is intentionally simple: every expense category is expressed as a percentage of the revenue you expect for the selected period. That means the math stays stable whether you’re doing $2,000/month as a freelancer or $2,000,000/year as a growing company. You can treat each slider as a “budget envelope” — a planned cap. When you plan this way, you instantly see whether your business model can support the team, marketing, rent, and taxes without accidentally erasing profit.

For any category i, the planner converts your percentage into a dollar amount:

• Category Amountᵢ = Revenue × (Percentᵢ ÷ 100)

Example: If monthly revenue is $50,000 and Marketing is 10%, the marketing budget is 50,000 × 0.10 = $5,000. This is the heart of the tool: you don’t need a spreadsheet to see what a percentage implies in real money.

Next, it sums the percentages:

• Total Allocation % = Σ Percentᵢ

If the total is over 100%, it means you’ve allocated more than your revenue. That’s not automatically “bad” (you might be in a temporary investment phase), but it is a signal that you need a conscious plan for the shortfall (cash reserves, financing, or cost cuts).

Planned profit is simply what’s left after your planned spending:

• Planned Profit = Revenue − Total Expenses
• Planned Profit Margin % = (Planned Profit ÷ Revenue) × 100

Profit margin is the number most founders and owners underestimate. A business can look “busy” and still be fragile if the margin is thin. A cleaner mental model: profit margin is how much of every $1 of revenue you keep after you’ve paid for delivery (COGS) and operations.

The target profit slider is a personal (or strategic) benchmark. The tool calculates the difference:

• Budget Gap (points) = Planned Profit Margin − Target Profit Margin

If the gap is negative, you’re under your target — meaning you’re planning to spend too much for the profit level you want. If it’s positive, you have breathing room: either increase buffer, reinvestment, or profit.

To make the results easier to interpret, the planner turns your situation into a single “snapshot” score. It’s not a scientific measure — it’s a clarity tool. The score rewards three things that tend to create resilient businesses:

• Profit strength: higher planned profit vs your target.
• Buffer discipline: setting aside something for surprises.
• Reinvestment: allocating money to improvement (systems, product, training, runway).

In plain language: a budget with decent profit, some buffer, and some reinvestment scores higher than a budget where every dollar is already spoken for.

How to use this planner in real life

The most useful budgets are the ones you actually revisit. Here’s a practical way to make this tool “stick” without turning it into an endless accounting project.

Many small businesses manage cash monthly. Agencies often forecast quarterly. If your revenue is seasonal, annual planning can help you avoid panic spending. Choose the period that matches your decision cycle.

In most models, the first constraints are delivery costs (COGS), payroll/contractors, and taxes. Set those first, then fit the rest (marketing, overhead, tools, other OpEx) around what remains.

If you say marketing is 10%, that’s a spending limit for the period. If your marketing is performing well, you might raise it — but you’ll do so knowing exactly what it does to profit.

Create a few saved versions:

• Base: what you think will happen.
• Lean mode: what you do if revenue dips 10–20%.
• Growth mode: what you do if you want to invest aggressively for growth.

When a decision arrives (hire, new software, ad spend), compare which scenario it belongs to. If it forces your total allocation above 100% in your base scenario, you’ll know you’re choosing burn — and you can plan the tradeoff intentionally.

The share buttons generate a concise summary. This is surprisingly useful when you’re talking to a cofounder, spouse, bookkeeper, mentor, or lender. It’s easier to align on “We’re targeting 15% profit and 2% buffer” than to argue over dozens of line items.

Three quick examples (so the numbers feel real)

These examples show how the same slider framework can fit different business models. Use them as intuition, not as universal rules — your margins depend on your industry, pricing, and growth stage.

Monthly revenue: $50,000. COGS is low because delivery is mostly labor. Payroll might be higher (30–45%), marketing moderate (5–12%), overhead moderate (5–15%). If the planned profit margin lands at 15–25%, many service businesses consider that healthy. The key risk is under-pricing: if payroll climbs but rates don’t, profit compresses quickly.

Revenue: $50,000/month. COGS can be 40–70% (product, shipping, fulfillment). Marketing may also be large (10–25%) depending on paid ads. That doesn’t mean the business is “bad” — it just means you must be disciplined about unit economics and pricing. If your total allocation creeps above 100%, the fastest lever is often improving contribution margin (COGS) or lowering CAC (marketing).

Revenue: $50,000/month. COGS might be lower (hosting, support, payment processing), often 5–20%. Payroll can be significant because engineering and support are real costs. Tools/software might be higher too. Many SaaS companies intentionally run at low profit (or negative profit) in growth mode, but they still budget so the burn is intentional and runway is clear.

If your profit is near zero, ask: “What happens if revenue dips 10%?” In many businesses, a small dip can turn into a cash crisis. That’s why even a small buffer (1–3%) is valuable — it prevents surprises from becoming emergencies.

Frequently Asked Questions

• Is this the same as an accounting budget?

  Not exactly. Accounting budgets are often line-item detailed. This is a planning budget that helps you quickly check feasibility: “If revenue is X, can we afford these categories and still hit profit?”

• What if my total allocation is over 100%?

  Then you’re planning to spend more than you earn. That might be a deliberate investment phase, but you should identify the funding source (cash reserves, financing) and define a timeline. If it’s accidental, trim the flexible categories first (tools, other OpEx, then marketing — depending on how you acquire customers).

• How do I choose a target profit margin?

  It depends on your industry, debt obligations, and growth stage. Many owners pick a target as a “guardrail” to prevent expenses from expanding to fill revenue. Start with something achievable, then refine as you learn.

• Do I need to include taxes here?

  If you’re a business owner, setting aside for taxes is often wise. This planner uses a “tax set-aside” percentage so you can avoid spending money that will later be owed. For specific tax planning, consult a professional.

• Does this tool store my financial data?

  No server storage. Calculations happen in your browser. If you click “Save Scenario”, it stores only on your device (localStorage). You can clear saved scenarios anytime.

• Can I use this for a personal budget?

  You can, but it’s designed for business categories. If you want a personal version, use the general Budget Planner linked below.

Use responsibly

This planner helps you reason about tradeoffs — it does not replace bookkeeping, tax planning, or professional advice. Numbers here are only as accurate as your revenue assumptions and category estimates.

• Update revenue estimate for the next period.
• Re-run your “Base” and “Lean” scenarios.
• Pick one category to improve (raise margin, cut waste, or increase buffer).
• Save the scenario and share it with whoever helps you make financial decisions.