S11 E25-28 TurboCharge Your Business Budgeting with Patty Lawrence

S11 E25-28 TurboCharge Your Business - 13 Weeks to Financial Literacy
IBGR.Network.

Welcome to TurboCharge Your Business, a show for business owners who are tired of just working IN the nuts and bolts of their businesses and ready to work ON the business itself from a big-picture, growth-oriented, strategic perspective. 

I’m Patty Lawrence: founder of TurboExecs, money finder, consulting CFO, and right hand to growth-minded CEO’s. This season is called 13 Weeks to Financial Literacy and over the course of the season, I’m teaching you everything you need to know to take your business from confused and chaotic to strategically growing with you in the driver’s seat. Before we get into this episode, you can reach me at turboexecs.com. 

BUDGETING

Today's show is about budgeting in your business. By the end of our time together, you'll gain insight into how budgeting enables faster decision making in your business.

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S11 E25 Budgeting: What the heck is it?
The strategic plan is the source of everything coming down the pike, so like capital planning and people planning, budgeting needs to align with your strategic plan’s vision.

Budgeting is: 

• A quantification of your goals, extracted from your strategic plan.
  
• A roadmap of how to get to your goals and targets, laying out the path to achieving your goals.
  

Budgets also provide control mechanisms, risk mitigation, a basis for measurement, and keep us on the path to achieving our goals. If you want to know what went right so you can keep doing it and what went wrong so you don’t repeat it, budgeting is key. It helps ensure your success against your goals and the roadmap you’ve set out to follow. 

Your budget says: here’s what I’ve said I’m going to execute against for the next year. If things change, of course, you can shift. But you don’t need to make decision making on the fly. You can make faster decisions because you’re already thought through some of those different scenarios, assumptions, and factors that have already been quantified into your budget. 

When you’ve done all that work up front, you have the ability to make decisions faster. Budgeting enables you to reduce your risk, make decisions faster, promote your measurements against your goals, and it provides elements of control. All of those things are beneficial to you as the business owner. Having those insights throughout the year is invaluable as you run your business.

Listen to “TurboCharge Your Business” on the International Business Growth Network or wherever you get podcasts and gain access to even more great resources at https://turboexecs.com/turbocharge. 



TAGS: budget for small business,budgeting,why budgets are important,small business budget,small business budgeting,business budget,budget,how to create a budget

S11 E26 Budgeting: Why do we do it? 
As business owners, we have a million things to do. So bottom line, why do we budget?

• It’s planning for the future and tying all of our planning tools together. We’re quantifying exactly what we’re doing with our business over the next year. 
  
• It supports cash flow management and financial resource planning for your business. You need to know what kind of cash flow you’re going to have in your business over the next year.
  
• It will help you understand where you need to secure financing in your business.
  
• It can help you respond to unexpected changes in your business.  
  
• It can help you measure performance against metrics. 
  
• It can help you track and monitor where there’s waste in your business.
  

Putting the plans for the next year into a budget helps get everyone aligned with expectations and vision, and it makes responding to unexpected changes easier because we all know what we’re expected to do.

With a budget, we can dig deeper and understand the sources of favorable and unfavorable gaps to get clear on the drivers, what’s working, and what’s not working. Our budget functions as our GPS for the year.
 
Listen to TurboCharge Your Business on the International Business Growth Network or wherever you get podcasts and gain access to even more great resources at https://turboexecs.com/turbocharge. 

TAGS: budget for small business,budgeting,why budgets are important,small business budget,small business budgeting,business budget,budget,how to create a budget

S11 E27 Budgeting: How do we do it?  
There's an art and a science to doing budgeting in your business, but everybody can do it. Sometimes it just takes a little bit of practice.

To me, the biggest indicator of where you’re going to go is where you’ve been. Past performance can offer a very good indicator of where you’re going in the future. On your expenses side, many of your recurring expenses will probably remain the same. Things that will differ may be things you’re going to do differently this year (according to your strategic plan). You need to take those assumptions, quantify them, and overlay them on top of past performance.

Another resource in addition to past performance is looking at the assumptions that went into those past budgets as well as research on the competitive landscape. The more inputs, especially high-trust ones, you put into your budget the better it will be.  

I always advocate for keeping your budget as simple as possible with as much granular detail as you need to support your direction and decision making. For example, if you want to track labor cost and don’t want it to be buried in overall payroll cost (which includes overhead wages for support things) in one bucket, separate that out. Keep it simple, but make sure you have enough detail to be able to make good and insightful decisions, and make it measurable because you’re going to want to be able to pull levers.

Making your budget measurable means you’re able to impact it. You also want to make your budget impactful, in that sense that it can offer insight into what is causing things to be better or worse in your company. 

When you make your budget measurable and impactful, you can improve your business as a result.

Listen to TurboCharge Your Business on the International Business Growth Network or wherever you get podcasts and gain access to even more great resources at https://turboexecs.com/turbocharge. 

TAGS: budget for small business,budgeting,why budgets are important,small business budget,small business budgeting,business budget,budget,how to create a budget

S11 E28 Budgeting: What do we do with it?
A tool is only as useful to your business as you use it. So how do you use your budget now that you’ve built it?

• Measure and manage. What gets measured gets managed, and you need to manage your financial results with regular reports referencing a benchmark of the budget. 
  
• Look at variances in the numbers versus the budget. These translate into potential action items. What’s the story they’re telling us, and where do we go from there? 
  
• Use the budget on a monthly basis to reassess and learn. Then, take that information into your next budget cycle and planning horizon. 
  
• Question expenses.
  
• Make timely, impactful decisions and respond to unexpected changes (this is predicated on your reporting being timely). 
  
• Update the budget based on changes (for example, if sales are taking off in a big way we might need more labor to support that).
  

TAGS: budget for small business,budgeting,why budgets are important,small business budget,small business budgeting,business budget,budget,how to create a budget

TurboCharge Your Business is a show for business owners who are tired of just working IN the nuts and bolts of their businesses and ready to work ON the business itself from a big-picture, growth-oriented, strategic perspective.

Listen to TurboCharge Your Business on the International Business Growth Network or wherever you get podcasts and gain access to even more great resources at https://turboexecs.com/turbocharge. 

Patty Lawrence is a money finder, consulting CFO, right hand to growth-minded CEOs, and founder of TurboExecs. At TurboExecs, she works with $2M+ professional services and non-profit organizations that struggle to get the timely & accurate financial reports they need to function, often because one person holds this information hostage or lacks the skills required to do the work.

Through outsourced accounting and CFO services, she and her team reveal the story behind the numbers so leaders confidently can make data-driven decisions that allow them to leap forward, trusting they have the team and finances in place for manageable, profitable growth. As a result, TurboExecs’ clients typically increase the bottom line by at least 15% and feel in full control of their finances and results.

Connect with TurboExecs at turboexecs.com. Continue the conversation with Patty on LinkedIn.

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