ARE YOU NEW TO BUDGETING AND FINANCIAL MODELING?

IF SO, THIS ARTICLE IS FOR YOU

It would be over-optimistic to state there will be only one aspect that may be confusing to you the first time you develop a budget for your business. But here is one I suggest you need to know before you even consider doing one!

... Let's say it right out, so that everybody in your team can commit to their budget conversations with the right level of expectations, and feel "less bad" when the following happens to them:

Your budget won't be right your first time around. It won't be right your second time around. Under some circumstances, it won't even be right your nth time around!

So why bother developing a budget, you may say?

And I will respond: you need to bother developing a budget for your business for the same reason you need to bother learning to drive a car before you go on a road trip: Your business will get you where you set it out to go more surely, faster and better once you master your budget process.

ITERATIONS & INTERACTIONS

It is inescapable that your budget will require several iterations and some crucial conversations before it is ready for your teams to execute upon. The budgeting process, done right, is both interactive and iterative. Expect that the process may even reveal some ugly truths about your business (or your team). It will certainly require crucial skills and time for you and your teams to master.... and once completed, it will still need to be adjusted. In truth, your budget will be a living thing.

KEEP YOUR EYES ON THE PRIZE

There are significant benefits of having a functional, executable budget in place for your business. Budgeting is the topic of abundant literature .... But for now, let's just say that the majority of what needs to happen in your business is guaranteed to come to you far easier when you have a budget, compared to not having one.

And then, here is the grand prize: you and your teams will gain back your most precious asset - time: Your time will be freed up to focus on issues that you cannot and should not encapsulate in a budget...

And this latter point, my friends, may propel or save your business.

Related Brigitte's Articles:

• Top benefits of having a budget
• Tips to minimize budgeting time while optimizing results
• What if I am a team of one, do I need a budget?

Suggested Reading Material (links):

• The Big Game of Business by Jack Stack
• Small Business Financial Management Kit for Dummies

(c) 2016 Brigitte Benquet - Unified Finance Organization

Brigitte Benquet is an interim CFO based in Austin, TX, specialized on startups and small & medium businesses who experience growth pain. www.unified-finance.org