Why Every Startup Needs a Budget
Most first-time founders have a vague sense of their expenses but no actual budget. A startup budget is not about restricting spending. It is about making intentional decisions about where your money goes.
The Five Budget Categories
Development: Hosting, infrastructure, dev tools, third-party APIs. Usually the largest line item for tech startups.
Legal: Incorporation, contracts, IP protection. Often under-budgeted.
Marketing: Paid ads, content creation, events, tools. Start at $0 and add spending only when you have a validated channel.
Operations: Software, accounting, insurance, bank fees. Boring but essential.
Team: Salaries, contractors, benefits. Often $0 in the earliest stage.
Monthly Budget Grid (SaaS Example)
Here is a realistic budget for a SaaS startup in Year 1:
| CATEGORY | MONTHLY | ANNUAL |
|---|---|---|
| Cloud hosting | $50-200 | $600-2,400 |
| Dev tools & SaaS | $100-300 | $1,200-3,600 |
| Legal (Year 1) | -- | $2,000-5,000 |
| Marketing | $500-2,000 | $6,000-24,000 |
| Ops software | $50-200 | $600-2,400 |
| Accounting | $100-300 | $1,200-3,600 |
| Insurance | $100-300 | $1,200-3,600 |
| TOTAL RANGE | $1,000-3,500/mo | $15,000-45,000/yr |
Commonly Under-Budgeted Items
Legal fees: Budget $2,000-5,000 for Year 1. Incorporation, terms of service, privacy policy, and at least one contract review.
Accounting: A good bookkeeper costs $100-300/month and saves you from tax surprises.
Insurance: General liability and errors and omissions. Not exciting, but essential.
Your own salary: Even a small salary ($2,000-4,000/month) prevents desperate decisions.
How to Cut Costs
Use free tiers aggressively. Most SaaS tools have generous free tiers.
Negotiate annual plans. Annual billing is usually 20-30% cheaper.
Delay hiring. Our venture studio model provides a full dev team for equity instead of salary.
Skip the office. Work from home or use a coworking day pass until you have 5+ team members.
Need help planning? Email partners@awasero.com.