Why your business absolutely needs a budget
Since I’ve joined the CSR team, I’ve assisted in creating budgets for lawyers, engineers, and even doctors, but the budget I’m proudest of is my personal budget. I even find myself looking forward to exporting my banking history into a CSV and running a color-coded variance analysis at the end of each month.
If you asked me last year what my personal budget looked like, I would have laughed in your face. What was the point? I had to spend money either way, so why bother planning for the inevitable? I paid my bills, my checking account looked solid, and I avoided Microsoft Excel at all costs (no pun intended), so why would I waste my time adding up how much I spent on groceries or gas?
I’ve learned through helping clients with their budget that that you can’t control what you don’t track. You’re much more likely to be in control of your life (and your business) if you create AND USE an operating budget.
Your budget is the starting point for all things strategic. Not only should your budget reflect the revenue you anticipate generating and the expenses you plan on paying for, but your mission, vision, and values should drive each line item. For instance, if your company values include community involvement and continued education, you can budget for charitable causes and fund quarterly training seminars for your staff.
Your budget should also help you look ahead. Many businesses have some sort of seasonal element and though an inconsistency in financial trends may seem daunting, it’s absolutely manageable. But, like I said, you can’t control what you don’t track.
While it may be painful at first, using a budget that is rooted in your strategy and helps you look ahead should be at the foundation of your business operations. Once the routine sets in, maybe you’ll even enjoy the little joys of a balanced budget and color-coded variance analysis like I have.
Check out expertiseinresults.com to learn more about how CSR drives budgets and other success enabling tools.