You’re in a leadership meeting.
The Founder/CEO looks around and says,
“We need a budget for next year.”
Everyone nods.
Then someone turns to you, the finance lead, and says,
“Can you get started?”

Your brain instantly goes:
Right. I’ll open Excel, plug in last year’s actuals, bump everything by 10%, and see what that looks like.

Stop.

If you’re doing this, you’re skipping the most important part of the budgeting process and setting yourself up for 3 months of firefighting, wasted time, and endless rework.

A budget is not just a spreadsheet.

It’s a strategic document that allocates limited resources to achieve a specific set of business goals.
And if those goals aren’t clear, or worse, not agreed upon, then the whole process is potentially a waste of time.

Here’s how to build a better startup budget: 

1. Start With Strategy, Not Spreadsheets

Before you even think about numbers, ask:
What is the company trying to achieve next year?

This means sitting down with the Founder/CEO and leadership team and getting aligned on:

• Growth targets (Revenue, Users, GMV, ARR?)
• Profit vs. growth trade-offs
• Fundraising timeline (Seed? Series A? Debt raise?)
• Major investments (New hires? Product lines? Expansion?)

This strategic clarity becomes your main KPIs.

If leadership is saying "double revenue" but also "stay cashflow positive", that’s a tension to solve before you budget.

📌 Output: A one-pager summary of 3–5 high-level company goals.

2. Gather Each Team’s Operational Plan

Next, meet with each department head and ask:

• What are your team’s top 3 priorities for next year?
• What’s changing from this year? What’s staying the same?
• What new resources (people, tools, suppliers) will you need?
• What KPIs will you be accountable for?

This gives you a realistic view of what the business actually plans to do, not just what they spent last year.

Don’t assume Marketing wants to double spend.
Don’t guess that Tech will stay flat.
Ask.

Side note: this is a big part of establishing your business partner relationships, if you haven't already.  Want to learn more about business partnering?  I wrote about that here.

📌 Output: Department-level inputs for hiring, tools, marketing spend, product launches, etc.

3. Create a Timeline and Workflow

Budgeting in startups is messy.
You need structure, or it will drag on for months or worse you will have internal politics to deal with.

Create a budget calendar with key deadlines, for example:

• Strategic goals aligned (Week 1)
• Department inputs due (Week 2–3)
• Initial draft built (Week 4)
• Review rounds (Weeks 5–6)
• Final board-ready version (Week 7+)

Use a tool like Notion, Asana, or a shared Google Sheet to track status across teams.  (or whatever tool your already have in-house)

📌 Tip: Give department heads a lightweight template. Don’t ask for a finance model. Just budget headlines and headcount assumptions.

4. Get Clear on Constraints

Every startup has constraints. The most common?

💸 Cash runway: How long until we run out of money?

🧑‍🤝‍🧑 Headcount limits: How many new hires can we actually afford?

⌛ Time: Can we execute this roadmap with the team we have?

If you have a 12-month runway and no confirmed raise, you’re not budgeting for aggressive headcount.
If you’re launching into a new market, make sure Marketing, Ops, and Finance are all on the same page.

📌 Build simple cash runway models early. Don’t leave it until the end.

5. Agree on Format & Review Process

Before you build the budget, clarify:

• Who will sign off on final numbers?
• What’s the format (1 version or phased scenarios)?
• What is the budget for: internal use, board approval, or investor deck?
• Decide whether you're building a stretch, base, or conservative version, or all three.

📌 Avoid endless versions by locking scope early.

6. Only Then: Build the Budget Model

Now you can open Excel. Or Google Sheets. Or your budgeting software.

Start with:

• Top-down targets from leadership
• Bottom-up inputs from each team
• Built-in checks for cash, hiring, gross margin, and EBITDA

This is where your finance skills shine. But the magic only happens if you did the strategic work first.

7. Test It With Scenarios

Once your base version is built, test it:

• What happens if revenue is 20% lower?
• What if fundraising is delayed by 6 months?
• What if hiring takes longer than planned?

These are the scenarios the Founder/CEO and board care about.
You’ll look a lot more strategic if you’ve already got the answers.

If your Founder/CEO says,
“We need a budget,”
don’t respond with a spreadsheet.
Respond with a question:
“Great, can we first align on strategy, goals, and key priorities?”

That’s how you go from finance manager to strategic partner.

📌 Want help running your next budget cycle? Start with our free Cashflow Template or check out the full course here.

Want to become a confident, strategic finance leader in a startup within the next 12 months? 

Here’s your plan:

1. Subscribe to my YouTube channel for weekly practical tips and real talk about startup finance leadership.
2. Read my book Financial Leadership Fundamentals to get clear on what’s expected of you and how to show up as a leader.
3. Join the Financial Leadership Fundamentals course to fast-track your growth with structure, support, and strategy that works in the real world.