A Budget (whether personal or business or government) is a Spending Plan.
Now, if the Spending Plan amount is equal to the Income, it is called a Balanced Budget. So, at some point, you must determine whether a balanced budget is required/desired.
With a managed effort, recording plans vs. actuals is important. So, before any spending plan (i.e., Budget) is prepared, it is essential to record actual expenses. These may later be prioritized into commitments, desirables, luxuries, and discretionary (or other) categories. But, a record of actual expenses is an important first step.
Now, in some cases, actual amounts are net available because you are just starting. So, a top-down estimate (considering information from experts, experience of others, similar situations, etc,) and a bottom-up (summing the costs of various categories) should be done repeatedly until they produce similar results.