Unless you’re Bear Grylls, happy to live on foraged food and camp under the stars, you’re going to need to make a minimum amount of money each month to cover essentials. Things someone like Bear might think of as luxuries: rent, clothes and your weekly grocery shop... That's where your Personal Survival Budget comes in.

What is a Personal Survival Budget?

When we help entrepreneurs and aspiring business owners – like you – to write your business plan, we always ask you to complete a Personal Survival Budget (PSB). This provides a realistic overview of how much money you need to live on each month.

It helps you prepare financially for the first few months of your business, which may not turn over enough money to provide you with an income at first.

By knowing what you need to live on, you’ll be able to make more informed decisions about how to fund your business idea and whether you’ll need any extra help.

How to fill in your Personal Survival Budget

Start by inputting all of your expenses.

This can be the scary bit! But remember, being in control of your finances makes you far more likely to succeed than burying your head in the sand. So take a deep breath and dive in.

Living costs: Start by thinking about your living costs. You might find it useful to look at your bank statements from the last three to six months to get an average of what you spend. Living costs include things like mortgage payments or rent, grocery shopping, entertainment, clothes, travel, petrol costs and prescriptions.

Family costs: If you’ve got a family, don’t forget you need to cover their costs too! School uniform and lunches, clothes and childcare costs all need including.

Monthly bills: Unless you live like a spartan, you’re bound to have bills. Maybe more than you realise?! From front-of-mind utility bills to I’d-forgotten-about-that furniture loans, tot up everything you make monthly payments for.

Debts: There’s no shame in having debts, so long as you service them regularly and responsibly. Include any outstanding credit card debt, loan repayments, car finance etc.

Savings: Putting a little away for a rainy day? Good for you! If you want to keep that up after you start your business, make sure its in your Personal Survival Budget.

Next, input your income

Don’t include any income from your proposed business here. The point of this exercise is to work out how you’ll survive if your startup doesn’t make much money in the first three months.

Input any income you’ll get from:

  • Your ongoing employment, if you will still have a full- or part-time job
  • Any benefits you receive (note that your eligibility for these may change once you start your business)
  • Personal savings (realistically, how much can you ‘borrow’ from yourself to live on)
  • Other income (such as share dividends or income from property)

What happens next?

After you’ve completed your Personal Survival Budget, you’ll submit it to your Business Adviser as part of your Start Up Loan application.

They’ll make sure you’ve taken everything into consideration and can afford to survive without any income from your business. We love business startups but not if they mean someone is going to starve in the process!

Your Business Adviser will consider your PSB alongside your business plan and revenue forecasts, to assess of the viability of your plan.

Don’t worry. You won’t be rejected for a Start Up Loan on the basis of your PSB. It is just part of our processes as a responsible lender, to make sure you won’t be in any financial difficulties as a result of taking out a loan.