People start their own business for all sorts of reasons – freedom, passion, boredom – you name it. But one reason that I have never seen is that they like budgeting . . . well, unless that person is an accountant, but you get the idea.
The fact is, there are two parts to any small business: the thing that you love to do (the web designer is great at design) and everything else (the legalities, accounting, advertising, and so on.) The challenge for most small business people is that they are really good at the passion part of their business but not as good at the other parts. But the thing is, it is those other parts that they really must master because that is what allows them to get to do that the part that they love.
Among those things that entrepreneurs are generally less enthusiastic about are, as I said, accounting and budgeting. Yet those are in fact almost more important than most of the other, more glamorous parts, of running a business. Making sure that expenses are covered, having enough money set aside to handle quarterly taxes, etc., these are the mundane things that go into the running of a small business. But even so, they are not always easy to master.
So the question is, is there some way to make them easier? You bet.
For starters, my pals here at Concur have taken the tedium out of expense reports with their great software. One of the best parts of being in business today is that there are so many tools available to save us time, money, and effort. So step one is making sure you have the right software – it makes a huge difference.
But beyond that, part of the problem is nomenclature; the word “budget” tends to have a negative connotation to it. It’s the dreaded B word. For most people, a budget is a restrictive dictate that says that, given limited resources, certain things are out of the question and just cannot be done.
No wonder people don’t like budgets.
That is why I would like to suggest that instead of the word “budget,” you try the word “plan,” because really, that is all a budget is. It is your plan for how you can best use your money and what resources you do have. Instead of thinking of a budget as a restrictive covenant, the smarter choice is to think of it as a permissive tool.
Would you like to spend more money on pay-per-click ads this year? Great, then do so. Look at your plan, decide how much you want to spend on pay-per-click, and then decide how to pay for it. If that means less for independent contractors this year, then so be it. You decide what your priorities are.
It is your plan after all.