It’s the end of January, and hopefully you’re already up and running with your 2024 budget — or you’re at least finalizing your plan after getting year-end numbers. But if you don’t have a budget and don’t plan to make one, please reconsider.
On this episode of The Clarity Advisors Show, host Ken Trupke offers seven reasons why your business should have a budget and explains how to get started creating one.
Timestamps
(01:15): Difference between personal and business budgets
(02:00): Seven reasons for a budget
(02:11): No. 7 – Evaluate performance and make adjustments
(02:45): No. 6 – Predict and control expenses
(04:02): No. 5 – Manage cash flow
(04:27): No. 4 – Report to lenders and investors
(05:17): No. 3 – Making decisions in total rather than piecemeal
(06:01): No. 2 – Take advantage of unplanned opportunities
(07:50): No. 1 – Align leaders and the team
(09:51) How to get started budgeting
(11:51): Make adjustments
(12:42): Why your budget will be wrong
Episode Quotes
“Budgets are important because they help you plan. It’s the old adage – people don’t plan to fail; they fail to plan.”
“Salaries are always an important budget line item because no matter what business you’re in, your team is your competitive advantage.”
“A budget provides a solid foundation for making all your business decisions.”
“You don’t necessarily need to get down to every single line item in your income statement to have an effective budget.”
“No matter how much time you spend on your budget, it will be wrong. And that’s okay.”
“As general Dwight Eisenhower put it over 80 years ago, ‘Plans are useless, but planning is indispensable.’”
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