Starting a business means you are no longer just doing the work. You are managing the money behind the work. A budget is the tool for that, and it does not need to be complicated. It needs to be honest, written down, and looked at once a month. In Ottawa it also needs to respect the calendar, because for many businesses here half the year’s revenue arrives in a five-month window.
Start with last year’s months, not this year’s hopes
Pull twelve months of revenue and write each month on a line. If you are new, borrow the shape from a similar business or from the city itself: tourism-facing shops peak from the Tulip Festival in May through Labour Day; downtown lunch spots track federal in-office days; contractors and consultants feel the federal fiscal year-end in March; almost everyone slows in January. Your budget should look like your year, not like twelve equal slices.
The fixed lines
These cost the same whether you sell nothing or sell out:
Add them up. That total is the number you must clear every month before you have made anything. Knowing it cold is the single most useful fact in your business.
The variable lines
These move with sales: cost of goods or materials, hourly staff, card processing fees (budget about 2 to 3% of card sales), packaging and shipping, marketing spend. Express each as a percentage of revenue based on last year, then apply it to each month’s revenue target. Your busy months will carry higher variable costs and that is fine; the point is that gross margin stays where you expect.
The set-aside lines
Two lines owners forget: HST collected (13% of taxable sales, not yours, moved to a separate account) and income tax (a quarter of profit for sole proprietors, or the corporate rate plus your personal draw for corporations). Put both in the budget as if they were expenses. They are.
Owner pay
A real line, a real amount. If the budget only works when you pay yourself nothing, the budget does not work.
The seasonal move
Now compare each month’s revenue target to that month’s fixed plus variable plus set-aside plus owner pay. Summer months will show a surplus; January will show a gap. Add up the gaps. That total is the cash cushion you need to carry into the slow season, and the surplus months are when you build it. A budget that shows this explicitly turns “winter is stressful” into “we need $14,000 in the account by October 31,” which is a problem you can solve.
Track it monthly, in 20 minutes
On the first business day of each month, put actuals beside budget. Three questions: Where was revenue versus plan? Which cost line was off by more than 10%? What does that change about next month? Write one sentence of answer for each. That is the whole review.
Where to get help
Invest Ottawa‘s small business advisors will review a budget with you at no charge, and the Ottawa Public Library has industry benchmark data you can use to sanity-check your margin assumptions. The BDC publishes free templates that work fine in a spreadsheet.
A budget is not a prediction. It is a decision about what you will do with the money before the money arrives. In a seasonal city, that decision is the difference between a calm February and a frightening one.