Crafting a comprehensive budget for your guitar teaching business is akin to tuning a musical instrument. It requires precision, frequent adjustments, and a keen sense of hearing – or in this case, an acute financial acumen – to strike the right notes.

Let's delve into the art and science of this financial orchestration.

• Defining Business Objectives:

The first step in creating a budget is to define your business objectives – just as a composer would outline the theme of a musical piece. Do you aim to expand your student base, launch online classes, or perhaps invest in high-end equipment?

Based on Amartya Sen's Capability Approach, your objectives should not be monetarily driven alone. Instead, they should aim at enhancing your capability to teach and your students' ability to learn, as these are the real indicators of your business success.

• Identifying Revenue Sources:

As in portfolio theory, diversification applies to revenue generation too. Your income may come from various sources – private guitar lessons, group classes, online tutorials, or sale of music-related products. A comprehensive list of all these income streams is crucial for an accurate budget.

• Estimating Expenses:

Once you've defined your revenue architecture, it's time to delineate your expenses. This includes both fixed costs (like rent, utilities, and insurance) and variable costs (such as marketing expenses, instrument maintenance, and teaching materials).

Consider the principle of Marginal Cost, a cornerstone of microeconomics. Each additional student you take on will incur an incremental cost (in terms of time, teaching materials, wear and tear on instruments, etc.). Plan for this in your budget, as it can significantly affect profitability.

• Creating a Profit & Loss Statement:

Next, establish a Profit & Loss (P&L) Statement, an accounting tool providing an overview of revenues, costs, and expenses incurred over time. The P&L statement allows you to gauge your business performance and adjust strategies as needed. It's an aural feedback loop; akin to listening to your guitar play after tuning it.

• Planning for Contingencies:

Just as a musician always has a spare set of strings, a smart business owner has a contingency plan. Set aside a percentage of your income for unforeseen expenses. The exact amount may depend on several factors, such as the volatility of your income stream (an economic concept known as income elasticity) and the likelihood of unexpected expenses (probability theory).

• Reviewing Regularly:

Lastly, remember that your budget is not set in stone. It should be a dynamic entity, tweaked and fine-tuned regularly, just like a well-played guitar. Regular review ensures your business stays in tune with economic conditions, business objectives, and revenue fluctuations.

Creating a budget for your guitar teaching business is a delicate balance of art and science, calling for an understanding of both musical pedagogy and financial management. The reward – a harmonious symphony of sustained profitability and growth – is well worth the effort.

It's worth mentioning that while we've explored the process in a linear fashion, in practice, it’s more an iterative procedure. You may need to cycle back to previous steps as you refine your estimates, much like the cyclical process in the systems theory.

Also, it's essential to remember the underlying hypothesis - that careful financial planning can lead to business success. Although empirically supported, it is not a guarantee. Other factors, such as the quality of teaching and market demand for guitar lessons, also play pivotal roles.

In conclusion, let your budget be the sheet music guiding your business, setting the rhythm and tone, but allow yourself some improvisation. After all, isn’t that what makes both business and music exciting?