How to build A BudgetDec 13, 2022
Over half of small businesses are run without a budget (Clutch - April 2022). Depending on whether you are bootstrapped or funded may dictate which half you fall into. It's actually one of the benefits of taking money, it requires the founders to build additional reporting and rigour into their culture. But still many founders avoid at all costs (& it all costs!)...
So why do you need a budget?
Assuming you've already launched your business and are now looking to get some more solid foundations in place to scale your business. One of the first areas to focus is the Budget.
Let me ask you this question, would you set out on a journey without knowing your destination, without knowing if you had enough fuel/power to get there?
As Founder CEOs you have three core areas to own. Those being: -
1) Vision - inspiring others to want to come on the journey and achieve this destination. The vision should act like gravity pulling founders, employees, customers, funders towards you to make it happen.
2) Culture - nurturing and living the values that will help you drive towards the vision above
3) Cash - not running out to be precise. I talk about the day the money ran out in one of my businesses. You never want to be in this situation. Once again, funded businesses are a different beast to bootstrapped.
We are focusing on the latter today. You can only have a sense of your expected cashflow, if you incorporate your projected sales, your known sales, your cost of sales, your overheads and any other loans/taxes to build a picture over time.
A draft budget can be easily built in hours, not days. It's much easier if you can follow a templated model and get a helping hand in the process. I've tried to make building your budget as painless as possible so you can focus on the things you love doing in your business. Take a look at how to do this in less than half a day... (a bit of work from your side and an hour with me to be precise!) - Budget Accelerator
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