“By failing to prepare, you are preparing to fail”
- Benjamin Franklin –
Charlie and I wrote down our insights and lessons from hearing Mr. Paterson’s business budget story and discussing it. Here are my key learnings:
- Yearly budget plan should be split to monthly budget plans (both for revenue and expenses) and preferably (for larger businesses) weekly budget
- A business budget should take into consideration the reality of your business (Are you planning to get all your services paid upfront? Do you plan to have payments schedule? Will you pay your worker before or after the work is done? Are your insurance premium paid in advance?)
- Something will always go wrong, when writing your business budget, remember to allocate funds to a miscellaneous or buffer expenses category
- On the revenue side of your budget, make sure to include the drivers to your business revenue numbers (for example your estimated number of clients your business will service, number of services your business will offer). Track those drivers as well and adjust your forecasted revenue (and variable expenses) based on your business reality. (Yes….less clients usually means less revenue)
- Sounds obvious, but make sure to include ALL your expenses, if you discover your business incur new expenses during the year make sure to add those expenses to your business budget
- Try to “bounce off” your budget with other people from your industry, I promise you will discover many hidden expenses you forgot to include (and if you are lucky some new revenue sources)
- Stick to your budget!
Once I understood these lessons, writing a budget was a much clearer task. Let me tell you about my fabulous 6 steps of creating my business budget. Read more
“Operating a business without a budget is like driving a car without a wheel, it seems ok until you reach the first turn on the road”
- Charlie & Liz –
“Charlie, I think I’m ready to write my first business budget.”
“Of course you are Liz, remember Mr. Paterson’s story?”
“Charlie, Let’s do it now!”
I hope after you read my last blog about the importance of writing a budget, you’ve already taken out your favorite yellow legal pad, tablet, or even a white napkin and started to write down some of your own ideas about your budget.
In this post I want to tell you what can go wrong when writing a budget and in the next one I will introduce my fabulous 6 steps I take when constructing my monthly and yearly budget.
I know some of you may stop here and say “Liz, come on what’s the big deal? I will just write down my expenses and review them from time to time and I’m done. Liz, come on, you can write about so many other things. I know budgeting is important, but budgeting is so easy, once you write it down you cannot make any mistakes, the trick is just writing it down”. Read more
“[As the Giant flies toward the missile]
Hogarth Hughes: [in the Giant's mind] You are who you choose to be.
The Iron Giant: Superman”
- The Iron Giant (1999) / Warner Bros. –
We are faced with many decisions throughout our lifetime. We are facing many decisions on a daily basis. Some decisions may sound simple, what should I wear today? Which type of cereals should I eat today? Some decisions are more complex, should I get 12 months unlimited yoga card? Should I rent this apartment? And some may be life changing decisions, what college should I attend? What profession should I pursue? Should I marry this guy? Should I start my own business? Should I be a business owner?
The important thing to remember is that we are the ones who choose, we own the decision, we own the outcome, we can not blame anyone for our decisions (not even ourselves!), we are accountable for making our decisions, we are responsible for acting based on the decision. We are who we choose to be.
Sounds simple, right? Of course we choose. Who else chooses? Of course we own our decisions. Who else owns them? So, why do we often blame others for the outcomes? Why do we make excuses? Why do we allow others to choose our reality? Read more
A budget tells us what we can’t afford, but it doesn’t keep us from buying it.
- William Feather -
“Liz, here are your allowances for the week, remember your budget!”
2 days later…
“Mom, I saw this great dress, I have to get it for Friday’s party! Can you give me $20?”
“Liz, what happened to your allowance? What happened to your budget?”
“Mom, I don’t know, I don’t know. It just never seems enough, can I just get $20?”
“Oh Lizzy, you need to control your expenses….”
(Years ago this was a typical weekly conversation between my mom, an esteemed owner of an accounting firm, and me, Liz, an over indulgent teenage spender) Read more
“When you enchant people, your goal is not to make money from them or to get them to do what you want, but to fill them with great delight”
- Guy Kawasaki –
I love Valentine’s Day, I love Valentine’s Day, I love Valentine’s Day!
It is not just the romantic dinner with my true love, it is not just the smell of chocolate on the streets and it is not even the special present I receive every year (although, if you read it now, and you know who you are! Do not stop with your beautiful gifts and greeting cards), it is a day in which I get a chance to delight my clients.
Valentine’s Day is a special day for any chocolate store owner. It is the fourth busiest day for candy and chocolate store owners. So you can definitely understand my excitement. This year my day started at 4 am, I wanted to make sure my little store is in perfect condition, all the unique chocolate boxes are at the front, and the shelves are organized and inviting. I opened a few chocolate boxes to create the oh so tempting smell, and made sure I have enough cocoa to create my special hot chocolate. Read more