Budgets owner-operators will actually use
A budget you check once a year isn't a budget. It's a guess from January.
Two budgets, not one
Revenue/gross-margin budget and an overhead budget. Owners who lump them together can never tell whether the issue is pricing or spending.
Compare monthly, not annually
Look at actual vs budget every month, the same week, with whoever runs the numbers. Variances older than 60 days are post-mortems, not decisions.
Build in seasonality
Flat 1/12 budgets for seasonal businesses are useless. Build the seasonal shape into the plan from the start.
Take your version of this question further
This is one operator-tested angle on the question. Your shop, your size, your trade, and your team change the answer. Ask your specific version inside Ask a Shop Owner to get a response grounded in how owners like you actually handled it.