Now that the busy season has quieted and the Cape has settled into its off-season rhythm, it’s a good time to take stock of how your business did this year and start planning for the next one. Whether you run a restaurant in Hyannis, a retail shop in Chatham, or a service business that depends on summer traffic, knowing how to create a budget for 2026 can help you stay steady through the ups and downs of the Cape Cod calendar.
Many business owners think of budgeting as a once-a-year exercise, but it’s really a roadmap for your financial decisions. A good budget helps you see where your money is going, prepare for slow months, and make confident choices about hiring, upgrades, and investments. Here’s how to build one that actually works for your business.
Step 1: Look Back At 2025 To See What Worked
Before you start planning for the year ahead, take a close look at 2025. Pull up your profit and loss statement, bank records, and payroll reports. Ask yourself: where did most of your revenue come from, and which expenses grew faster than expected?
On Cape Cod, this usually means breaking your numbers down by season rather than just looking at the annual totals. A restaurant that’s packed from June through September might see thin margins in February, even if the overall year looks healthy. By spotting those seasonal patterns, you can plan ahead for when cash flow dips.
It also helps to separate your fixed expenses, like rent, insurance, and accounting fees, from variable ones such as inventory, hourly labor, and utilities. Knowing what stays constant and what fluctuates gives you more control when business slows.
Looking to maximize your savings before the year ends? Check out our guide, End of Year Tax-Planning: 6 Ways To Save Money Now, for practical strategies to reduce your tax bill and keep more money in your pocket.
Step 2: Define What You Want To Achieve In 2026
First, start off with specific goals that you’ll like to set in your business next year. Maybe you want to renovate your dining area, expand catering, or build a cash reserve so you’re not stressing every winter. Whatever your priorities are, write them down and make them measurable.
Some examples of business goals could be:
- Increase net profit margin from 12% to 15%
- Add one new service line or expand into off-Cape clients
- Build a three-month operating reserve to smooth seasonal dips
- Pay down high-interest business debt
If your goal is to boost profits by 15%, think about what that means in real terms. Can you raise menu prices slightly, reduce food waste, or renegotiate supplier contracts? If you plan to hire a new chef or open a second location, what extra revenue will you need to support that?
The clearer your goals, the easier it becomes to allocate your resources. A strong budget helps to connect your day-to-day spending to those bigger plans.
Step 3: Map Out Your Revenue And Expenses
Start with a revenue projection for the coming year. You can do this by looking at last year’s sales and adjusting for what you know will change, like higher supplier costs, pricing updates, or construction schedules.
Remember to factor in the seasonality of your revenue. Many Cape businesses bring in most of their income over a few key months, so spreading that evenly across the year can make your budget misleading.
Next, map out your expenses and separate your fixed and variable costs, so you’ll see which parts of your budget you can adjust if cash flow gets tight.
- Fixed costs: Include rent, insurance, equipment leases, payroll for core staff, accounting fees, and insurance premiums or utilities.
- Variable costs: Inventory, seasonal staff wages, credit-card fees, shipping, and marketing.
It’s also a good idea to have an emergency reserve, enough to cover two or three months of expenses. This can make all the difference for a slow sales month.
Step 4: Do A Cash Flow Forecast & Check it Throughout the Year
Even profitable businesses can run into trouble if cash isn’t coming in when bills are due. That’s especially true on the Cape, where the flow of customers changes so dramatically throughout the year. Creating a simple cash flow forecast can help you predict when your balance will dip and plan accordingly.
If you know February is always slow, schedule equipment upgrades or deep-cleaning projects then, when labor costs might be lower. If you’re busiest in July, set aside part of that income to cover off-season costs instead of drawing it all out as owner pay.
Checking in monthly helps you catch problems early before they snowball. All it takes is just a quick look at how actual income and expenses compare to your forecast.
Step 5: Build Local And State Costs Into Your Plan
Running a small business on Cape Cod comes with its own financial quirks. Property taxes, insurance, and utilities can be higher than in other parts of Massachusetts, and coastal weather can add unexpected repair costs. Be realistic about these factors when building your budget.
It’s also worth planning for state taxes and regulatory costs. Massachusetts’ Pass-Through Entity Tax (PTET) election, for example, can be beneficial for S-corp or LLC owners, but it has to be elected in advance. Building that into your projections can help you optimize your year-end strategy later.
If you rely on seasonal staff, factor in wage increases, housing stipends, or recruitment expenses early rather than scrambling mid-summer. And if you’re thinking of making big purchases, like kitchen equipment or delivery vehicles, your CPA can help you plan the timing so you maximize depreciation deductions.
Step 6: Review Your Budget With Your CPA Before The Year Begins
Once you’ve built a rough draft of your budget, bring it to your CPA. They can stress-test your assumptions, flag areas where you might be underestimating costs, and help you align your tax strategy with your financial goals.
A short conversation now can save you a lot of stress later. Maybe your income projections are too optimistic, or you’re missing a deduction that could free up extra cash. Your CPA can also help you set up simple tools, like monthly profit tracking or cash flow reports, so staying on top of your numbers is not a chore.
Start Planning Now
At Steven M. Ellard CPA, we work with small business owners across Cape Cod to turn their financial data into actionable plans. Whether you’re managing a busy summer restaurant or running a year-round service company, a thoughtful budget helps you make smarter decisions.
The best time to create your 2026 budget is before the new year begins. Take a few hours this winter to get organized and make next summer’s busy season more manageable.
If you’d like help reviewing your numbers or setting up a budgeting process that fits your business, our team is here to guide you.
Book a call with us today!