2026 Budgeting Best Practices for Emerging Brands

Can you believe that summer is already coming to a close and it’s time to start budgeting for 2026? Creating a budget can seem like a daunting task, and to some extent it is. Melding hours of research and team input into a flexible, but detailed plan that balances optimism and realism is time consuming.

Our experts at JPG Talent are always here to help perfect that plan. In the meantime, we’ve provided a few of our best practices and tips to help guide your brand’s initial budget meetings.  

Start early and involve the whole team

A good budget isn’t built in a day. Schedule a series of meetings over the course of a few months to allow each department time to collaborate in between sessions and find solutions to the previous meeting’s concerns.  

When every department is actively involved, they learn where and why resources are divided in certain ways. Your budget isn’t meant to show favoritism over one department versus another – it’s meant to provide the correct amount of support so every aspect can thrive. Reviewing a budget as a whole can also show where and how big your gaps are, helping you clearly articulate your investment needs to PE/VC partners.  

Build a flexible plan

Your budget can’t be too cumbersome to adapt. The F&B industry is unpredictable, with ever-changing ingredient costs, consumer supply and demand, tariffs and law changes, a bad production run, etc. Your budget must be simple enough to routinely edit, with wiggle room for unexpected cost jumps and smaller profit margins.

Pro-tip: Right off the bat, set aside a percentage of your estimated revenue into an emergency fund. Having a bit of padding can cushion a blow of unforeseen equipment failures or a botched production run.

Set realistic goals

A good place to start is by realistically identifying fixed and variable costs. Then set revenue goals based on the leaner months of the year. Focusing on lean month results forces your team to think creatively about making their department successful with a small budget; this also helps account for some seasonality as our industry experiences demand fluctuations around holidays, certain times of the year, and harvest cycles.    

We recommend creating a few different budget scenarios based off conservative, moderate, and aggressive growth. Showing multiple examples helps your team understand the impact growth has on your brand’s financial stability, while keeping ‘best-case scenario’ wishes in check.

Plan for growth, but also to turn down opportunities

Growth is exciting, but it comes with significant costs that can quickly spiral if unplanned. Scaling involves more than just producing more; it requires investments in logistics, staffing, marketing, facilities, equipment, distribution, technology, and compliance.

Careful planning is essential to manage this complexity. You’ll need to assess storage capacity, supplier readiness, and whether your current systems can support expanded operations. Equally important is ensuring sufficient working capital to fund increased expenses, from raw materials and payroll to logistics and marketing, so growth doesn’t outpace your resources.

As a new brand, the pressure from investors and buyers to make revenue quickly can tempt you to say yes to any opportunity. We encourage prioritizing company values and quality to build a sustainable growth pace and consistent customer base.

Understand profit margins by sales channels

A common mistake we see with new clients is combining all sales channels into a single set of calculations and reports. In today’s omnichannel retail environment, this approach can be misleading as costs and fees vary widely between channels. For instance, selling on Amazon often incurs significantly higher fees and storage costs compared to DTC platforms like Shopify. Add in retail, grocery, and wholesale, and you’re looking at a broad spectrum of margins.

Understanding the true cost of each channel is essential. One high-performing channel could be masking the losses of another. In some cases, it might be worth cutting the most expensive channels to focus on those with better returns. Alternatively, you may choose to keep lower-margin channels, like Amazon or retail, for the brand exposure they provide. Either way, you can’t make informed decisions without analyzing each channel separately.

Physical proximity can help

Geographic proximity is crucial for emerging brands in their early stages. Being physically close to your initial retail locations allows you to actively support your brand in person—conducting demos, gathering informal customer feedback, and collecting valuable insights that would be difficult to obtain remotely, all in a cost-effective manner.

Hands-on experience equips you with the knowledge needed for successful expansion. When the time comes to scale and delegate responsibilities to third-party reps, you'll already understand how to measure performance and identify areas for improvement because you've done it yourself.

Optimize labor costs

Outsource or keep in-house? Each has its advantages. An in-house team understands your business inside and out and is crucial for keeping daily operations running smoothly. They’ll account for a consistent budget amount from month to month.  

Bringing in outside help turns a small team into a flexible workforce. Outsourcing, such as contractors, fractional talent, and freelancers, can provide expertise to fill resource gaps within your core group. They can be hired on a short-term or project basis to achieve business goals while you pay only for the help you need.

Track and reevaluate regularly

Regular reevaluation sessions help you stay agile, making small adjustments before they become big problems. Every month you don’t stay within a targeted amount impacts the following month’s spending power (and should be adjusted accordingly). Be realistic – if you’re coming in consistently over budget, something needs to give.

Your cost of goods sold (COGS) isn’t something you calculate once and forget—it should be reviewed regularly as part of your broader budgeting process. Market conditions, material costs, labor availability, and supply chain disruptions can shift quickly and impact margins overnight. Make it a habit to revisit your pricing, supplier terms, and production costs throughout the year. Ask the tough questions, explore alternatives, and don’t rely too heavily on any one supplier.  

Monitor the right metrics

Brands assess their performance against the KPIs and targets set during initial budgeting meetings to scale efficiently. Our team recommends a few crucial metrics to use as a starting base for your data review.

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- Monitoring velocity reveals which SKUs are performing best, proves or disproves retailer success, and tightens forecasting accuracy.  

- Reviewing contribution margin can help you see which SKUs are contributing to profits and which ones need operation or price adjustments.

- A tight gross margin can reveal areas of overspending, a healthy margin signals that your operations are on track, and a robust margin allows flexibility to allocate additional resources towards different growth areas.

- Inventory days on hand measures how long your inventory sits before it’s sold. If too much cash is being tied up in unsold products, you could stifle growth. On the flip side, being too lean could result in missed opportunities and sales when demand spikes.  

- The cash conversion cycle can provide your budget review with a more holistic, well-rounded view of overall cash flow, and can encourage your team to find ways to quicken the cycle so you’re not constantly digging into your cash reserves.