How to Estimate Business Expenses

Start with what you know. You don't need a full accounting report to get a useful estimate.

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Start with your fixed costs

Fixed costs are the same every month regardless of how much business you do. These are the easiest to estimate because they don't change. If you're not sure what your revenue is, start with how to estimate monthly revenue first.

Rent or office space

Software subscriptions (accounting, project management, email tools)

Phone and internet

Insurance

Loan or equipment payments

Then add variable costs

Variable costs change with your business activity. Use a monthly average if they fluctuate.

Contractor or freelancer payments

Marketing and advertising spend

Cost of goods or materials

Shipping or delivery costs

Meals, travel, or client expenses

What to leave out

For this calculator, do not include the salary of the person you're thinking of hiring. That goes in the separate salary field — see how to estimate salary cost if you need help with that number. Also leave out one-time costs — focus only on your regular monthly spend.

Example breakdown

Rent $1,200

Software tools $180

Contractor (part-time) $600

Marketing $300

Other fixed costs $220

Total monthly expenses $2,500

Once you have a rough number, plug it into the calculator to see if hiring is safe.

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