For finance professionals in startups and scaleups, one of the biggest questions is: should we stick with a traditional budget, or would a rolling forecast be a better fit?

The answer?

It depends on the stage of your business.

For early-stage startups still finding product-market fit, expanding into new regions, or managing a tight cash runway, a rolling forecast is almost always the better choice.

Here’s why.

The Problem with Traditional Budgets in Startups

A budget is a fixed financial plan, typically covering 12 months, that lays out projected revenue, costs, and cash flow. While budgets work well in stable, predictable businesses, startups don’t operate in that world.

Most early-stage companies are dealing with uncertain revenue streams, shifting business models, and evolving KPIs. If you’re still refining your pricing, testing customer acquisition channels, or pivoting based on early feedback, a budget created six months ago can quickly become irrelevant.

Startups and scaleups need flexibility—which is where a rolling forecast comes in.

Why Rolling Forecasts Work Best for Startups

A rolling forecast updates financial projections on a continuous basis, usually monthly or quarterly, so founders and finance leaders always have a clear view of the company’s financial trajectory.

Here’s why rolling forecasts make sense for startups:

✅ Managing Cash Runway – Your cash burn rate is constantly changing. A rolling forecast helps you adjust spending in real-time based on actual results, preventing nasty surprises.

✅ Adapting to New KPIs – Startups don’t always know which metrics matter most when they launch. A rolling forecast allows you to incorporate new data as you learn more about customer acquisition, churn, and revenue growth.

✅ Scenario Planning – Founders can test different growth scenarios (e.g., hiring new sales reps, expanding to new regions, increasing ad spend) and understand the impact before making decisions.

✅ Investor and Board Confidence – Investors don’t just want to see last year’s budget—they want real-time insights into financial performance and how the business is adapting. Rolling forecasts provide that.

When a Budget Still Makes Sense

That’s not to say budgets are completely useless for startups. If your business is post-Series A with predictable revenue, a stable customer base, and long sales cycles, then setting an annual budget can provide structure and accountability. However, even in this case, it should be paired with a rolling forecast to allow for adaptability.

How to Transition from a Budget to a Rolling Forecast

If your startup is still clinging to an outdated budget but needs more agility, here’s how to shift to a rolling forecast model:

1️⃣ Set a Core Forecasting Period – Most startups find a 12-month rolling forecast, updated quarterly (or monthly at very early stage), works best. This ensures you always have a forward-looking financial plan.

2️⃣ Use a Bottom-Up Approach – Base your projections on actual financial data, operational metrics, and market conditions rather than a top-down target that may no longer be relevant.

3️⃣ Incorporate KPIs that Evolve Over Time – Early-stage businesses often discover new growth levers (e.g., a better-performing marketing channel or an unexpected customer segment). A rolling forecast lets you adjust based on these insights.

4️⃣ Focus on Cash First – Before anything else, make sure your rolling forecast prioritises cash runway and burn rate, especially if you’re pre-revenue or relying on fundraising.

5️⃣ Keep It Simple – A forecast doesn’t need to be overly complex. Start with key revenue drivers, major costs, and cash position, and refine from there.

Agility Wins in Startups

For most early-stage startups, a fixed budget is too rigid to be useful. A rolling forecast gives you real-time financial clarity, helping you manage cash runway, adjust strategy based on changing KPIs, and make faster, data-driven decisions.

If you’re a finance professional in a startup or scaleup and still operating with a static budget, it’s time to rethink your approach. A rolling forecast isn’t just a finance tool—it’s a survival tool.

Need help building a rolling forecast for your startup? Join my Financial Leadership Fundamentals course, where I walk finance professionals through how to create dynamic forecasting models that actually work in a startup environment.

Want to fast-track your finance career growth?  Check out the steps in our Framework below to get started:

1. Sign up to our next workshop.
2. Work with me in the Financial Leadership Foundations course  that includes monthly Q&A sessions where we can discuss all of your questions and how to apply your learnings to your current role. 
3. Download the Advanced Management accounts course to showcase your skills as a finance leader to the Founder, leadership team and the Board.
4. Book at FLF Career Planning session.