Zero Based Budget Definition

Zero Based Budgeting requires companies to build their budget from the ground up each period, starting from zero rather than adjusting previous budgets. Every expense must be evaluated and approved based on current needs and priorities. This approach helps eliminate unnecessary spending and improves cost efficiency. For startups, it can be particularly useful in controlling burn rate and ensuring that resources are allocated to high-impact areas. While more time-consuming, it leads to more disciplined financial planning.