Business Budgets Aren’t a Good Idea – They’re a Necessity

Love ’em or hate ’em, small business budgets are a vital part of your success. Much like traffic signs, they’re put in place to guide you from risk, keep you on the right path, and bring you safely to your goals. So why do so many entrepreneurs ignore them?

Join me for a brief 76 seconds while I break down the budget barriers to find out why you need one, and what it should focus on. Because budgets aren’t just a good idea – they’re a necessity.

Click to tweet this: Do you have a business budget? If so, are you using it? @DaveCrenshaw

Video transcription:

I’m often shocked at how often business owners admit that they’re not using a budget. Yet, budgets are critical for your success. They’re a bit like traffic signs. They’re there to help you reach your destination, yet you ignore them at your own peril.

Here are two reasons why every business needs a budget. First of all, it helps you focus on profit, not just sales. And second, a budget helps you set up a strategy for your growth. It allows you to balance your expectations of income with how you’re going to spend that income.

If you’re not using a budget right now, I urge you to talk with an accountant or with your business coach.

So, my question for you is simple—do you have a budget and if you have a budget, are you using it?

Also, if you have a question you’d like me to answer on a future video, ask that below as well.

Thanks for watching. Now keep your eyes on the road.

Join the conversation: Do you have a business budget? If so, are you using it?

I respond to every question and comment. So, please, join the conversation!


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4 Archived Responses to “Business Budgets Aren’t a Good Idea – They’re a Necessity”

  1. Angy Ford says:

    YES we have a budget. One thing that helped me a ton as a growing business is to have a percentage budget for supplies. In my business supplies are proportional to growth so a percentage budget has been key. This way as we grow the budget automatically increases proportionally and when our lower time in summer comes it automatically decreases and my directors can see that and buy within the parameters.

  2. Nick Webb says:

    Sadly, NO.

    We do tend to be conservative spenders, though, and we certainly keep a close eye on monthly financials and cash on hand (defensive much?).

    However, I do see the value right now. Specifically, I’m trying to decide if I can afford to hire a Project Manager (could be a part-time contractor). On the one hand my time is worth 8-10x more than I’d have to pay for such a person, but it’s only taking 1 to 1.5 hours a day for me to do the work, and there would be a lot of upfront training. Then again it’s 1-1.5 hours a day I don’t really have.

    If I had a budget and we were consistently running a surplus compared to that, it would give me more confidence to add another person to our growing team.

    • Dave Crenshaw says:

      Thanks for the comment, Nick. This phrase in particular caught my attention: “it’s only taking 1 to 1.5 hours a day for me to do the work, and there would be a lot of upfront training”

      In my experience of coaching hundreds of entrepreneurs, I find that their performance is usually 2x that of the typical employee. In other words, what takes you 1.5 hours will likely take the average employee 3 hours. Why? Part of it is motivation and the drive to see the business succeed. Part of it is a natural gift for problem solving.

      So, as you’re preparing the budget for the position, keep in mind you may need at least a part-time employee to fill the need.