I'm trying to create a "bare bones" budget for my business - the absolute minimum I need to make each month to keep the lights on. It's a scary but necessary number to know.

Business & Financial Management for Contractors
1

I’ve been avoiding this for a while, but it’s time to figure out what I really need to make it through each month.

Thinking about all the essentials—rent, groceries, phone and internet bills, and insurance. No extra spending, just what it takes to stay afloat.

Seeing all the numbers together is pretty daunting, but I know having this minimum will help me decide which projects are worth pursuing.

2

Did this last year when work dried up. Built a spreadsheet with three columns - fixed costs, variable costs I control, and personal bare minimums.

The personal stuff was a reality check. Thought I could live super cheap until I tracked actual grocery costs and emergency repairs.

Big tip - calculate both 30 and 90 day numbers. You might survive one lean month, but you still need next month’s rent and quarterly bills.

Don’t trust your gut on spending either. I pulled bank statements and couldn’t believe how much random crap added up, even when I thought I was being careful.

3

Track your spending for a month - don’t guess. Write down every single payment.

I update mine every few months since costs creep up. Insurance increases, phone bills change, car repairs happen.

Once you’ve got the real number, tack on 15% for random stuff that’ll come up.

4

Been doing this every year for a decade. Start with what actually hits your bank account each month, not what you think you spend.

I pull up three months of statements and highlight everything that would shut down if I don’t pay it. Rent, utilities, insurance, minimum loan payments. Then I add 20% because something always breaks.

This video breaks down the whole process step by step if you want to see it done properly.

Once you have that number, you know exactly what jobs to walk away from. Makes pricing way easier when you know your real floor.

5

Yeah, this number sucks to calculate but it’s incredibly useful.

I split mine into two buckets:

  • Business costs (software, phone, internet, equipment maintenance)
  • Personal survival (rent, food, insurance, minimum debt payments)

Personal expenses are usually the bigger chunk. Check 3 months of bank statements for real numbers - don’t guess.

Knowing this floor makes rejecting lowball projects so much easier. Client offers half your rate? The math speaks for itself.

Add a 10-15% buffer if possible. Stuff always costs more than expected.

6

I just add up rent utilities food and call it good

7

Gas money and basic tool replacements usually catch me off guard. Those add up fast.