A startup budget adds up what you must spend before opening, what it costs to run each month, and the cash to carry you until sales cover costs.
Short answer
Your startup budget has three parts: one-off costs to open, monthly running costs including your own pay, and the cash you will need to cover the gap in the months before sales pay for everything. Add the three, then add a buffer of about 10% for what you missed. That total is how much money you need to start.
Checked against CIPC, SARS and the Department of Employment and Labour on 22 September 2026.
What goes into a startup budget?
A startup budget has three parts, and most new owners only plan for the first.
| Part | What it covers |
|---|---|
| One-off costs | Everything you pay once before or at opening: equipment, first stock, signage, deposits, registration |
| Monthly running costs | What it costs to keep the doors open every month: rent, electricity, data, fees, wages and your own pay |
| Cash to get through the early months | The shortfall in the months when sales are still building and do not yet cover running costs |
The third part is the one that closes new businesses. Sales rarely start at full strength. If you have spent everything on opening, there is nothing left to pay the rent in month two.
How do you work out your one-off costs?
List every item you must pay for before your first customer, and get a real price for each. Walk through your first day of trading and write down everything you touch: equipment, furniture, tools, first stock, a sign, printing, a card machine.
Then add the costs that are easy to forget: the deposit on premises, connecting electricity, and registering the business. Buy second-hand where the quality allows. A newer chair does not earn more money than a good used one.
In South Africa
Registering a private company with the Companies and Intellectual Property Commission (CIPC) costs R175 with the short-form Memorandum of Incorporation, plus R50 to reserve a name online. Confirm current fees on the CIPC forms and fees page.
How do you estimate monthly running costs?
Split them into fixed costs, which stay roughly the same whatever you sell, and variable costs, which rise and fall with sales. Rent, data and insurance are fixed. Stock, materials and card fees are variable.
Include your own pay as a fixed cost. If the business cannot pay you, it is not yet working, and a budget that leaves you out hides that. Our Know your numbers course shows how real running costs are usually higher than the ones owners remember.
Once you know your fixed costs and what share of each sale goes on variable costs, you can work out your break-even point: the sales you need each month to cover everything.
In South Africa
If you employ someone, the national minimum wage is R30.23 an hour from 1 March 2026. For 40 hours a week, that is at least R5,239.87 a month, plus 1% of pay as the employer’s Unemployment Insurance Fund (UIF) contribution. The Skills Development Levy applies only once your total payroll is expected to exceed R500,000 a year. VAT registration becomes compulsory once taxable sales exceed, or are likely to exceed, R2.3 million in 12 months.
How much cash do you need to get through the first months?
Enough to cover every month’s shortfall until sales reach break-even. Forecast your sales month by month, starting low and building. For each month, take away the variable costs and fixed costs. Add up the months that come out negative. That total is the cash you need in the bank on opening day, on top of your one-off costs.
Worked example
Ayanda is opening a hair salon in Soshanguve, working alone at first. Her one-off costs:
| One-off costs | Rand |
|---|---|
| Two second-hand salon chairs and a basin | 18 000 |
| Dryers, clippers and tools | 9 500 |
| First stock of products | 6 000 |
| Signage and printing | 2 500 |
| Rental deposit | 7 000 |
| Company registration and name reservation | 225 |
| Total one-off costs | 43 225 |
Her fixed costs are R17,800 a month: rent R7,000, electricity and water R1,800, phone and data R600, bank and card machine fees R400, and her own pay R8,000. Products used on clients cost about 15% of each sale, so she keeps 85% of every rand she takes in. She breaks even at R20,941 of sales a month (R17,800 divided by 0.85).
| Month | Sales | Kept (85%) | Gap after R17,800 fixed costs |
|---|---|---|---|
| 1 | 6 000 | 5 100 | 12 700 |
| 2 | 10 000 | 8 500 | 9 300 |
| 3 | 14 000 | 11 900 | 5 900 |
| 4 | 18 000 | 15 300 | 2 500 |
| 5 | 21 000 | 17 850 | 0 |
| Cash needed for the early months | 30 400 | ||
Her startup budget is R43,225 of one-off costs plus R30,400 to carry her to break-even, which is R73,625. With a buffer of R7,500, about 10%, she needs R81,125 to open safely. Had she budgeted only for her one-off costs, she would have had nothing to cover the R12,700 gap in her first month.
Watch out
Forecasting sales from the day you open at full strength. Most new businesses need time to build a customer base. If your plan only works when month one looks like month six, it does not work.
How do you keep the budget useful after you open?
Compare it with what actually happened, every month. Put your real sales and costs next to the budget, see where they differ, and update the months ahead. A budget you only look at once is a guess. One you check monthly becomes your cash flow forecast, and it warns you about a shortfall while there is still time to act.
If the gap is bigger than the money you have, the answer is not always funding. You can open smaller, buy less stock at first, or take deposits from customers. Our article Business funding in South Africa: which option fits you? compares your options, from your own savings to loans.
What to do next
- Fill in the free Start-up Budget template.
- Find your break-even point with the break-even calculator (free for members).
- Turn your budget into a monthly forecast with the 12-month Cash Flow Forecast and the free Know your numbers course.
Sources
- CIPC, Company forms and fees, checked 22 September 2026
- Department of Employment and Labour, National Minimum Wage increase to R30.23 per hour, 3 February 2026, checked 22 September 2026
- SARS, Unemployment Insurance Fund, checked 22 September 2026
- SARS, Skills Development Levy, checked 22 September 2026
- SARS, Register for VAT, checked 22 September 2026
Frequently asked questions
What is the difference between a startup budget and a cash flow forecast?
A startup budget tells you how much money you need before you open. A cash flow forecast tracks money in and out, month by month, once you are trading. Your budget’s early months become the first months of your forecast.
Should I include my own salary in the budget?
Yes. Leaving it out makes the business look profitable when it is not, and you will still need money to live on while it grows.
How big should my buffer be?
There is no fixed rule. The example uses about 10% as a starting point. Make it bigger if your costs are uncertain, such as renovating premises or importing equipment.
This article is general information, checked against the official sources shown on the date given. It is not legal, tax or financial advice. Rules change, so confirm with the official source or a qualified adviser before you act.
Updated on 22 September 2026: rewritten and shortened. Added current CIPC fees, the 2026 national minimum wage, UIF, Skills Development Levy and VAT thresholds, a worked example in rands, and links to the Start-up Budget template and calculators. Named accounting software removed.