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Donna Genie argues most solo business owners don't need a formal budget unless they have staff spending money. Instead, use judgment to prioritize needs over wants, and forecast sales with variable expenses while tracking fixed costs.
Donna Genie argues most solo business owners don't need a formal budget unless they have staff spending money. Instead, use judgment to prioritize needs over wants, and forecast sales with variable expenses while tracking fixed costs.
Hi there, it's Donna Bordeaux. I wanted to talk to you about an important subject today that I get asked about a lot and that is about budgeting. Many people say I have to have a budget. When I ask about what types of things they've been struggling with, they say I need a budget, I don't have one, and I really need to get the time where I can set up a budget. Alright, well, mind is going to be blown. We're going to fix this problem in less than five minutes. So start your clocks. We're ready. Okay, so first off, I'm going to tell you, unless you have a staff of people working under you, that you give the authorization to spend your money to, you do not need a budget. As a small business owner, typically you're in charge of spending your own money. Now let me give you an example of how this works. Let's say that your budget for office supplies for this month is $150 and your printer just ran out of toner and you need to buy a new cartridge. But that will take you over budget. Is the answer to leave your printer without toner until next month? No. You're a small business owner, you're smart. You can make those kinds of decisions and make calls on what you need to spend money on versus what you might want to spend money on. So a budget, in that case would be an exercise of futility. You will not need a budget. So in budgeting, the answer is using your brain, figuring out what you need to spend money on and prioritizing the wants versus the needs. So if you have that list, that item on your list where you need to conquer to do a budget for your business, check it off, it's done. You don't need one. Your CPA told you so. All right, now one other thing I'll mention. A lot of times when people say they need a budget, they really don't mean they need a budget for spending. They really mean they need a forecast for what they want things to look like going forward. Remember that those are two different things and I'm okay with you having a forecast. First off though, forecast your sales and look at the variable expenses that go right along with your sales. Your fixed costs should remain about the same unless you're planning some larger expansion. So if you need help with forecasting, that's a whole different ballgame. Please let me know. Alright, so we're under our five minutes. We conquered that task for the day. Move on, Open your mind to something new. Thank you. And have a great day.
