How I’d Budget a £200K/Year Business (Business & Personal Breakdown)

If your business is making £200K a year, how should you budget to maximize profit, pay yourself efficiently, and structure your personal finances? In this video, I break down exactly how I’d approach business spending, personal budgeting, tax efficiency, and financial planning for a service-based business owner at this income level.

🔹 Business Budget Breakdown

• Virtual businesses: 50% net margin

• Office-based businesses: 40% net margin (but is it necessary?)

• Keep subscriptions under 10% of revenue – audit & cancel unnecessary expenses

• Spend around 30% on salaries & freelancers

• The final 10% of expenses should go toward perks, efficiency tools & quality-of-life improvements

• Keep 10-15% of revenue as business reserves until you have 6-12 months of runway

🔹 How to Pay Yourself Efficiently

• £10K-£20K pension contribution (tax-efficient & lowers Corporation Tax)

• £12,570 salary (staying under the tax-free threshold)

• £50K+ in dividends (keeping personal tax liability low)

• Max out ISA (£20K per year) in Stocks & Shares or Cash, depending on your financial goals

🔹 Personal Budget Strategy

• Aim for £2,500/month in expenses, with rent/mortgage ideally under £1K/month

• Break down spending into 4 categories:
  ✅ Basic Needs – Food, utilities, essential expenses
  ✅ Luxury Needs – Gym, restaurants, hobbies
  ✅ Travel – Holidays, transport, car expenses
  ✅ Gifts & Giving – Charitable donations, special occasions

• Prioritize spending based on what matters most to you

🔹 Final Tips:

• Keep as many expenses through the business as legally possible

• Automate tax savings & investments to build long-term wealth

• Optimize for profit, not just revenue growth

📩 Need tailored financial advice? Reach out & let’s chat!

📌 Financial Disclaimer:
This video is for informational purposes only and does not constitute financial, tax, or investment advice. Please consult a professional regarding your specific situation.