Why I use a Budget In Running a Business (and never stick to it)

If you've ever prepared a budget for someone else's business, you probably shudder at the thought of doing one for yours.  But in a small business, it's crucial and can take under an hour.

It's creating a plan of how much you need to sell.  If you need to take home x after tax, then how much do you need to sell/ invoice.  That's it.  You get a pretty good feel straight away if you need to adjust hour rates, eliminate some services or even Aquire new customers.

It shouldn't be a manacle, or something to procrastinate about.  Check back in at least quarterly, because your business changes.  Opportunities come up, staff get hired.  Make it a living breathing fully flexible guesstimate.   

Don't lie in bed wondering if you can make payroll if you want to hire someone new.   We run a fully flexible budget, in that we will never say no to an expense that is in line with the strategy and will grow our business.  We just update that document and make sure we hit our new goals.  

Businesses change too rapidly to be able to forecast out 12 months in advance, and we always vary from a budget, as it was only ever a guess.   But you always have a clear vision of what you do need to be doing to succeed.

Create a budget on the back of an envelope if you have one handy, and use it to set some goals for your business.