No matter what type of business you own, you must understand what it takes to run an office and prepare a budget within a range that does not exceed the revenues of the business. A basic budget should include only expenses that are absolutely necessary to running the business. As revenues increase, you can adjust the budget accordingly.

Things You Will Need
  • List of expenditures

  • Budgeting software such as Quicken or computation software such as Microsoft Excel or an accounting ledger

Step 1.

Based on the business's annual budget, determine a reasonable total budget for the office--usually within 10 to 15 percent of the annual business budget.

Step 2.

Take some time to think about what is absolutely necessary to run your business--for example, utilities (electricity, telephone, Internet, water, gas) or office supplies (pens, pencils, legal pads, copy paper, stapler/staples, tape, printer ink, mailing supplies, filing supplies). Depending on your line of business, you may need specialized equipment or supplies.

Step 3.

Estimate the monthly average cost for all utilities and quantities of office supplies (i.e., one case of copy paper per month). Do some research on utility or office supply vendors to get the most cost-effective pricing, and ask them to send you quotes.

Step 4.

Multiply the cost of the items times the monthly quantity to get the total monthly cost per item. Add up the total monthly costs to get a total monthly budget. Multiply the total monthly budget by 12 (for 12 months) to get an annual office budget.

Step 5.

Compare the total to the original estimate (determined in Step 1). If the total is less, don't adjust the estimate--allow yourself some "wiggle room" for unanticipated or higher-than-anticipated expenses. If the total is more, take another look at your proposed budget. Consider eliminating expenses that are not absolutely necessary, decreasing the quantity of supplies needed, or doing more research on vendors.

Step 6.

If your total budget is not adjustable and includes only necessary expenses, adjust your estimate to your new total and try to cut in other areas to maintain a balanced budget for your business.


Budgets must be actively managed. Consider balancing the budget on a monthly basis. Regular monitoring of the budget prevents consistent overbudgeting and allows time to reallocate funds where necessary. Evaluate the budget on a quarterly basis to plan for large-scale adjustments or to include new items.


If you must overspend on an item, remember that it must be readjusted later, or spending on another item reduced, to keep the budget balanced. If you end up spending less on an item, try to use that as a new standard to save money in the long run.