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The importance of setting a monthly budget for the store and how to get started
- Aug 17
- 4 min read
Updated: Aug 29
Introduction
In the world of business, whether you run a small store in a neighborhood or a growing business in a mall,... Monthly budget It represents the backbone of sound financial management. It is not just a table of numbers, but rather a map that guides every decision you make within your store, from setting prices to timing the purchase of goods and even decisions to expand or withdraw.
In this article, we will explain The importance of the monthly budget And how to build one for your project from scratch, even if you are not a financial expert, with examples and practical advice that ensures clarity of vision and achieving profits.
First: What is the monthly budget?
A monthly budget is a financial plan in which you expect:
How much money will come into the store (revenue)?
How much will he get out of it? (Expenses)
Then based on the difference between the two, you know whether you will win, lose, or need to adjust.
A budget helps you:
Expense control
Performance evaluation
Make correct decisions based on realistic numbers
Plan ahead with confidence
Second: Why do you need a monthly budget for your project?
1. Cost control
Without a budget, you may spend more than you earn without even realizing it.
2. Detecting problems early
The budget quickly shows you what's wrong: Are there excessive expenses? Are sales low? Is there an unproductive employee?
3. Organizing cash flow
Know in advance when you will need to pay bills or salaries, and plan to have cash at the right time.
4. Evaluation of actual performance
By comparing the budget with the actual results every month, you know where you are successful, and where you need to adjust.
5. Facilitate making expansion decisions
You will not decide to open a new branch or purchase additional equipment based on “feel”, but on Confirmed numbers.
Third: Components of the store’s monthly budget
1. Expected revenues
Estimating all amounts expected to come in, such as:
Product sales
Additional services (such as delivery)
Any income from secondary sources (such as renting part of the shop)
📌 Example: If you sell at a rate of 1000 riyals per day x 30 days = 30,000 riyals per month As expected revenue
2. Fixed expenses
These are expenses that do not change much from month to month, such as:
Rent
Salaries
Internet and electricity bills
Software subscriptions or cashier systems
Equipment maintenance
3. Variable expenses
Expenses change according to the shop’s activity, such as:
Purchasing goods or raw materials
Delivery cost
Packaging expenses
Marketing or advertising
Delivery or electronic payment commissions
4. Non-recurring (emergency) expenses
Create a reserve item for unexpected expenses, such as:
Hardware failure
Repairs in the shop
Government violations or fees
5. Savings or investment item
It is preferable to set aside a fixed percentage of your profits:
To expand in the future
For emergency
To redecorate the shop or purchase new equipment
📌 Example: 10% of net profit per month.
Fourth: Steps to prepare a monthly budget for your project
Step 1: Collect data for the previous month
Start by analyzing the previous months:
What was the actual revenue?
What expenses did you pay?
Did the month end with a profit or a loss?
Step 2: Create a budget spreadsheet
Use Google Sheets or Excel, and divide the table into:
item
Estimate (SAR)
Actual (SAR)
the difference
Expected revenue
30,000
28,500
-1,500
Purchase goods
10,000
11,000
+1,000
Rent
5,000
5,000
0
Employee salaries
8,000
8,000
0
Marketing
2,000
1,500
-500
Maintenance/reserve
1,000
0
-1,000
Net profit
4,000
3,000
-1,000
Step 3: Set monthly goals
Your goals should not just be “make a profit”, but rather:
We increase revenues by 10%
Reduce costs by 5%
We increase repeat orders
We raise the average invoice value
Fifth: Tools that help you prepare the budget
Google Sheets/Excel ➤ -
(Free and easy to edit and analyze)
-Accounting programs such as: notebook - entries - Zoho Books ➤ You enter invoices and expenses and the net profit is calculated for you
-Point of sale (POS) systems ➤ Provides direct reports on sales and inventory
-Expense management apps (such as Wallet or Spendee) ➤ Help you keep track of daily exchange
Sixth: Golden tips for budget success
✅ Be realistic
Do not overestimate revenues or underestimate expenses.
✅ Monitor performance weekly
Do not wait until the end of the month, review the budget weekly to correct it in time.
✅ Hire an accountant (even if part-time)
It can help you prepare a professional budget and accurately analyze financial performance.
✅ Distinguish between “necessary” and “luxury” expenses.
Not every spend is necessary… Review each item and ask yourself: Does this make a difference in revenue or customer satisfaction?
Seventh: What do you do if you exceed the budget?
If you discover in the middle of the month that expenses exceed revenues, do not panic, but:
Stop any unnecessary drainage
Negotiate with suppliers To reduce the cost or postpone payment
Focus on quick offers To increase sales
Gather the team and share the situation with them To find collective solutions
Reset your expectations for next month
Eighth: Examples of monthly budgets (by activity)
Example 1: Small coffee shop
item
Value (SAR)
Expected revenue
35,000
Buy coffee and materials
10,000
Rent
6,000
Salaries
8,000
Bills and electricity
1,000
marketing
2,000
Reserve
1,000
Expected profit
7,000
Example 2: Women's clothing store
item
Value (SAR)
Expected revenue
60,000
Purchase the goods
30,000
Rent
7,000
Female employees
10,000
Marketing (Influencers/Ads)
5,000
Additional operating expenses
3,000
Expected profit
5,000
Conclusion
A budget is not just a table of numbers; A tool for survival, expansion and growth Your small business deserves to be managed professionally, and the monthly budget is the first step in this direction.
Start simple, but commit to analyzing, monitoring performance, and improving your tools every month.
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