American Author Dave Ramsey wisely said: “A budget is telling your money where to go, instead of wondering where it all went.”
Building your budget is an important step towards achieving your dreams.
A budget is a bit like: Your best friend. They keep you on the straight and narrow, they will challenge you, they are adaptable, and above all, they will answer you honestly.
Yes, your budget is your underrated best friend.
My experience is that those businesses who have a budget are streets ahead – they play their game every day with clarity and purpose, driving towards the prize.
Here’s 4 big reasons why you should have a budget:
- A budget will help you determine if you have the resources to achieve what you want.
- Building a budget provides an opportunity to consider anticipated change, and plan for it.
- A budget creates financial roadmap to guide you and your team towards success.
- Budgeting is not simply about accounting, it is also about being accountable.
The key ingredients:
- Resources – employees, full time, part time, freelance;
- Running costs – office, infrastructure, professional development, upgrades, expansion, rewards;
- Contribution margin – team productivity levels, and profit targets;
- Revenue – gross profit target, pipeline, and your strategy for closing the gap.
A budget is the essential ingredient of all successful businesses – if you don’t have a budget, you will not have a blueprint to follow, or a benchmark to measure your progress. You will also be missing a loyal best friend.
Budgeting is not an option, it’s a necessity.
And once you have a budget in place, keep your eye on the prize by reviewing your actual results against your budget every month, and re-forecasting quarterly, or at least half-way through the year, to know how you will end up at the end of the year, before you get there.
If you have not yet drafted your budget, or you would like to ‘test it’ with me – consider taking up my finance guru on call complimentary skype meeting session. If you are an agency with a $2-5m turnover, 5-10 staff, it will only take us 30 minutes to compute your ‘magic number’ billings and gross profit/revenue targets.
Just do it – and let’s get your new budget best-friend up to speed. I look forward to hearing from you.