How this calculator works
Each line is a cash amount for one month. Income lines are added together, expense lines are added together, and the monthly balance is the difference. Multiplying by twelve gives the annual operating balance. One-time startup costs are then subtracted to show the first-year net, and dividing the one-time total by a positive monthly balance estimates how many months of trading recover those costs. This is a cash budget, so use after-tax cash figures and keep loan principal and owner drawings out of the expense lines unless you want them treated as spending.
Formula
Monthly balance = sum of monthly income - sum of monthly expenses. Annual operating balance = monthly balance × 12. First-year net = annual operating balance - one-time costs. Payback months = one-time costs / monthly balance.
Worked example
Monthly income of $8,000 and expenses of $5,000 leave $3,000 a month, or $36,000 a year. One-time startup costs of $12,000 give a first-year net of $24,000, and the startup costs are recovered after four months of trading.
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Frequently asked questions
Are these figures before or after tax?
Use after-tax amounts, because tax is a real cash outflow. If you only have pre-tax income, estimate the tax and add it as an expense line so the balance reflects cash you can keep.
How should I handle seasonal months?
This budget uses one representative month. For a seasonal business, enter average monthly figures for a first look, then repeat the calculation for a slow month and a busy month to see the range.
Why is payback missing?
Payback is shown only when the monthly balance is positive. A negative balance means trading is not covering running costs, so one-time costs are never recovered at that rate.