“You can't form a budget without knowing where you're trying to go.” – Matt Patrick
As we turn the calendar to a fresh new year, most business owners feel some combination of excitement and overwhelm. A new year means new goals and new opportunities. But if we’re not intentional, it can also mean the same old chaos.
If you’re like many business owners, you've probably ended more years than you’d like by asking yourself, “Where did the money go?” or “Did we actually hit any of our goals?”
This guide is here to help you change that, with a simple, structured approach to setting goals, building a forecast, and planning with purpose.
At Patrick Accounting, we’ve helped hundreds of business owners take this step, turning uncertainty into clarity by building budgets that actually support their goals. If you’re ready to be more intentional with your planning in 2026, this guide is a great place to start.
1. Reflect Before You Forecast
Before you dive into setting new goals or running numbers, stop and look back. Ask these questions:
- Where did we start in 2025 vs. where did we end?
- What worked really well?
- What broke?
- What surprised us?
- Where did we grow, and where did we stall?
Your answers don’t need to be perfect. They just need to be honest. Don’t make excuses. Look for trends and momentum that you can build (or correct) in the year ahead.
Pro Tip
Think beyond just reviewing financials. Review how well your team executed on priorities, how your customers experienced your services, and whether your internal operations kept pace with your growth.
2. Set Goals Using the “Good-Better-Best” Model
We’re still in a business environment that can shift fast economically, legislatively, and operationally. So, when setting your 2026 goals, build in flexibility.
Use a tiered goal-setting framework:
- Good = A conservative but acceptable target if nothing changes.
- Better = A stretch goal that challenges your team.
- Best = The dream scenario if everything breaks your way.
This approach gives your team targets to rally around, but it also helps you make planning decisions under different conditions. That way, if things get shaky mid-year, you already have a plan in place.
Pro Tip
Tie your 1-year goals to your 3- and 10-year targets. Your annual plan is just one mile marker on a longer road.
3. Organize Priorities with Swim Lanes
One of our favorite tools for planning is what we call “swim lanes.” Think of swim lanes as broad categories of strategic focus. These don’t change much year-to-year, even if the projects inside them do.
Common swim lanes we use:
- People – Hiring, training, leadership development
- Services – Operational efficiency, delivery improvements
- Technology – Software, automations, tools
- Facilities – Space, equipment, infrastructure
- Profitability – Pricing, margins, cash flow
By setting goals within each lane, you keep your plan balanced. You don’t over-focus on one area while neglecting the others. Every lane gets attention and moves forward, even if it’s just a small project or improvement.
4. Budget Backwards Using Profit First Thinking
Most business owners budget like this:
Revenue – Expenses = Profit
But that’s a reactive model. If you overspend, your profit disappears.
We recommend flipping that equation:
Revenue – Profit = Expenses
This is the Profit First mindset. Start by deciding how much profit you want to earn. Then, build your expense plan based on what’s left.
For example, if you want to make $200,000 in profit and expect to earn $1 million in revenue, you now have $800,000 to work with. That’s your pool for salaries, marketing, tools, rent, etc. It forces you to get intentional about how you spend.
Pro Tip
Start here: “What do I want to make this year?” Then, back into what you need to sell, produce, and staff accordingly.
5. Build a Budget with Real-World Inputs
We know that budgeting can feel overwhelming. But it’s just about putting numbers to your goals in a way that makes sense.
Here’s how to approach it:
- Start with Revenue Goals
Base this on your sales targets and reasonable growth assumptions. - Map Out Labor Needs
Who do you need to hire to meet your goals? When will they start? How long will it take to onboard them? - Add in Tech, Tools, and Overhead
What are your fixed and variable expenses? Consider software, rent, subscriptions, and other support costs. - Layer in Marketing and Sales Spend
These can be harder to predict, but use historical data and new initiatives to estimate. Tie spending to lead generation goals. - Account for Seasonality or Timing
Some businesses (like lawn care and HVAC companies) have busy seasons. Your spending and income won’t be equal month-to-month. Plan accordingly.
Pro Tip
Don’t wait til January. Start this in October or November if possible. That gives you time to gather input and make smarter decisions.
6. Forecast with Confidence, Even If You’re New
You don’t need to be a financial expert to forecast effectively, but you do need a plan.
If you're a newer business:
- Start by defining how much you need to make.
- Then, work backwards: What has to happen (in sales, capacity, etc.) to get there?
- Don’t overthink it. Build your best-guess plan, then refine as you learn more.
If you're an established business:
- Use your most recent 3-4 months of performance as a better indicator than last year’s January numbers.
- Forecast quarterly or monthly, but keep an annual big picture in mind.
Pro Tip
Have a “version 1” of your budget that stays fixed, and then revise a working forecast quarterly to reflect what’s actually happening.
7. Track KPIs Monthly, Not Just Financials
You don’t need a full P&L every week to know if you’re on track. Sometimes, four or five key numbers are all it takes.
Here are a few examples:
- Revenue per truck/technician/provider
- Labor as a percentage of revenue
- Gross margin percentage
- Number of new customers acquired
- Revenue per customer or ticket
If you're not ready for a full budget, start here. KPIs give you a faster feedback loop and help you catch issues early, before they snowball.
Pro Tip
Ask yourself, “What three to five numbers drive my profit?”
Track those first.
8. Avoid These Common Budgeting Mistakes
Don’t spend money just to lower your taxes.
Buying that $80K truck in December may save you $20K in taxes, but you’re still out $60K cash. Only buy what you actually need.
Don’t treat your budget like a straitjacket.
Your plan should direct you, not confine you. If you need to adjust based on new info, do it. Just be intentional.
Don’t forget to plan for reserves.
Need to make a big equipment purchase next year? Or replace technology? Start budgeting now, not when things break.
Don’t exclude your team.
If department leads don’t have budget visibility, they’ll either overspend or underperform. Empower them with clear boundaries.
Don’t wait until March.
The longer you delay budgeting, the fewer options you have to adjust midstream.
9. Put Your Plan into Action
A budget sitting in a Google Drive doesn’t help anyone.
You need to bring it to life:
- Hold a Q1 planning meeting. Review budget and goals with your leadership team.
- Set quarterly check-ins. Revisit performance and make needed adjustments.
- Assign ownership. Who is responsible for each line item or initiative?
- Give your team “buckets of freedom.” Allow decision-making within defined spending ranges.
- Use tech tools to track. Even basic spreadsheets or dashboards can help visualize progress.
Pro Tip
Remember: The best budget is one that gets used, not one that’s “perfect.”
It’s Time to Stop Hoping and Start Planning
Too many small business owners operate on hope.
- They hope sales will grow.
- They hope profit will appear.
- They hope expenses won’t spike.
Unfortunately, that’s not a strategy.
In 2026, it’s time to take control. Set clear goals. Build a real budget. Track the right numbers. And keep your team focused on where you’re going.
Success doesn’t come from guesswork. It comes from intentional action.
Let’s build your 2026 plan together.
Whether you're stuck on budgeting, forecasting, defining swim lanes, or just deciding where to start, our team at Patrick Accounting is here to help.
This is one of the key steps we guide clients through as part of the One Step Better Client Journey, helping business owners move from reactive to intentional with their money and decisions. If you're ready to stop guessing and start planning with purpose, we’ll help you map it out and build a budget that gets you where you want to go.
Schedule a consultation and take the first step toward a more focused, intentional year.
