Is Your Side Hustle Really Enough to Support You? A Bookkeeper's Take on SBO Budgets
Most of us started our business because we loved the work — not because we were dying to build a budget spreadsheet. But somewhere between the second surprise renewal fee and the tax bill you didn't see coming, it dawns on you: without a real budget, the business is running you.
For this episode I sat down with Hillary Booton, who has been my best friend for many years and happens to be an accountant. She's managed the books for several small businesses and also supports a large construction firm, so she sees the whole spectrum — the solo operator working out of a spare bedroom and the multi-crew shop with a real payroll. What follows is what I took away from that conversation.
Budgeting is about decisions, not discipline
The reframe Hillary opened with is the one that stuck with me. Budgeting isn't just about controlling costs. It's about making informed decisions and keeping your cash flow steady enough that you can see the decisions coming.
Without a budget, she said, business owners tend to do one of three things: overcommit financially, miss growth opportunities because they don't know what they can afford, or get caught off guard by surprise costs. Notice that all three are decision problems, not spending problems.
The pitfall she called out here is one I've fallen into: failing to separate essential operating expenses from nice-to-have items. When those live in the same bucket, every trim feels like the same kind of cut. They aren't.
The six categories every SBO budget should have
If you don't have a budget yet, this is the frame Hillary uses to start one. Six categories, in this order:
- Fixed operating costs — rent, insurance, utilities. The stuff that shows up whether you sell anything or not.
- Variable operating costs — inventory, shipping, production supplies. Ties to how busy you are.
- Marketing and sales expenses — advertising, promotions, website upkeep.
- Technology and tools — software subscriptions, hardware.
- Staffing and professional services — wages, accountants, legal fees.
- Taxes and regulatory fees — income tax, payroll tax, business licenses.
The pitfall she flagged: underestimating how much seasonal fluctuations will move the variable line. If you had one good July, that isn't your July number — it's your best July number. Budget from your worst months, not your best.
The costs that catch people off guard
This section of the conversation was the most useful for me because I've been burned by every single one. Hillary called them "irregular or hidden," but really they're just costs we forget to schedule for.
- Annual renewals for insurance, licenses, and subscriptions
- Equipment maintenance or replacement
- Professional development and training
- Unexpected repairs or compliance fees
The pitfall is treating these as one-off events instead of what they actually are: recurring, predictable costs. Your insurance renewal is not a surprise. Your domain renews. Your certifications lapse. Your laptop wears out. Put them on the calendar, put a monthly allocation against them, and stop calling them emergencies.
Build a growth fund before you need it
One thing Hillary said that changed how I think about this: even small monthly allocations toward a "growth fund" build up into real capital over time. So when the opportunity to launch a new product or expand comes up, you don't have to disrupt day-to-day operations to fund it.
The pitfall here is spending all profit as it comes in. If every dollar you earn is either paying a bill or paying you, there is no room to say yes to a new opportunity when it shows up — and opportunities almost never show up on a convenient schedule.
The overspending traps
Hillary named four traps she sees over and over:
- Overbuying inventory based on optimism instead of actual sales data
- Overinvesting in technology without evaluating ROI
- Excessive marketing spend without clear tracking of what it's returning
- Expanding too quickly without a steady revenue base
The umbrella pitfall for all four is what she called shiny object syndrome — chasing trends instead of sticking to the business plan. If you're anything like me, this one hits. The whole point of a plan is so that a shiny object has to earn its way in.
Review monthly. Adjust often. Don't treat it as static.
Her rule: at minimum, compare your budget to actual expenses monthly. That's the checkpoint that catches overspending early and lets you move funds where they're actually needed.
The pitfall — and it's the one that quietly kills budgets that got off to a great start — is treating the budget as static. Build it, set it, forget it. Then a year later you look at it and it doesn't reflect anything about how the business actually runs anymore. A budget is a living document. If you're not editing it, you're not using it.
Hillary's parting line
I asked her for her single biggest piece of advice for small business owners on expense budgeting. Her answer:
Be realistic, proactive, and disciplined. Great budgets are based on actual data, not guesses, and they get revisited often. Budgeting is less about restriction and more about smart freedom — knowing you have resources when opportunities arise.
Smart freedom. That's the whole thing.
The discernment question
Here's what I'd sit with after this conversation: which of the six categories in your business is currently a guess? Not "I have a general sense" — actually a guess.
Pick that one. Spend an hour this week putting a real number on it. That's the whole assignment.
Prefer to listen? Find the episode here.
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