Starting a business can change your household income before the new venture becomes consistently profitable. A personal survival budget for a start up loan helps you work out how much your household needs to cover its regular living costs while the business gets established. It is one of the three core documents assessed in an application, so it helps to understand what belongs in it and how the final figure is calculated.
What Should Your Budget Cover?
The budget looks at your household’s monthly income and outgoings. The figures should reflect your actual circumstances and match the information shown in your bank statements.
Start by listing income that will continue after the business begins. If you are leaving employment, for example, do not treat that salary as ongoing income. If you receive benefits or other income, check how starting a business could affect them before including them as continuing income.
Your monthly outgoings can include:
- Rent or mortgage
- Council tax
- Gas, electricity and other household bills
- Food and groceries
- Clothing
- Transport and car costs
- Insurance
- Phone and internet
- TV Licence
- Subscriptions
- Childcare
- Loan and credit commitments
- Leisure and entertainment
- Savings
- Other regular household spending
You can combine related costs where appropriate, such as recording household bills as one monthly figure, provided the amount is realistic and supported by your financial records.
How Much Do You Actually Need?
The basic calculation is straightforward:
Monthly household outgoings − continuing household income = monthly shortfall
For illustration, if a household spends £2,400 each month and has £1,700 of continuing income, the shortfall is £700. That £700 represents the amount the business may need to provide as your salary once trading begins.
This figure should then flow into the business’s cash flow forecast. A shortfall does not automatically mean your application will be rejected. It is the realistic number the rest of your plan should be built on, and finding it before you launch is far better than discovering it months into trading.
Keep the Figures Consistent
Accuracy matters more than making the numbers look comfortable. Compare your budget with your bank statements and make sure regular payments have not been missed. A budget that disagrees with your statements is one of the main causes of delay.
Avoid including expenses that belong in the business rather than the household budget. Start Up Loan repayments belong in the business cash flow forecast, not the personal survival budget, because putting them in both double-counts the amount.
It is also useful to review less frequent costs. Annual payments such as car tax or insurance can be converted into a realistic monthly amount so they are not overlooked.
Getting Help Building the Budget
bizbritain is an FCA-authorised credit broker and an official Business Support Partner for the Start Up Loans scheme. Its free myplan tool builds the budget through short, plain-English questions and shows any shortfall before the section is finished.
Using a structured process can make it easier to identify regular costs and produce figures that are consistent across the required documents.
Before You Submit Your Figures
Review the budget alongside your business plan and cash flow forecast. Your household income should reflect what will actually continue, your outgoings should match your financial records, and any resulting income requirement should appear in the business forecast.
A personal survival budget is therefore more than a list of household expenses. It gives you a realistic minimum income requirement and helps you understand what the business needs to generate as it grows.
