Monday, April 15, 2013

Planning to Win


It’s hard not to think of money on tax day. 

As always I had my taxes prepared by my true friend and longtime accountant Ardra Alexander

I have to give Ardra a shout-out because she’s efficient, honest, discreet  smart, knowledgeable and absolutely passionate about numbers and spreadsheets.  Not only do I use her services but I’ve connected her with the majority of my clients.  She does a great job keeping them on their financial toes while making certain they file their taxes on time.

If tax talk is associated to money in my mind, money is for certain associated to budgets or what’s usually the case; the lack of budgets. 

I must say the whole conversation about budgets is so charged and loaded, isn't it?

How many entrepreneurs truly create a yearly budget that is the roadmap for their upcoming financial business activity?  How many of us can say for instance that the company projects it will increase its monthly marketing expenditure by $500.00 in June to maybe update the website?  

In other words we're not “winging it” and deciding on the spur of the moment to spend $500.00 on the website, we've actually budgeted for it and understand the need for increased revenue to cover the expenditure.  And if we do budget how many of us actually look at that budget on a monthly basis for financial guidance?     

Here are three really good reasons you might want to consider running your enterprise with a budget:     
  .   
       Planning. Planning sounds so boring until you actually do it.  I PLAN to exercise every morning and so I exercise every morning; which makes me feel fabulous and smart.  Budgeting is planning that shows us how to use our revenue to achieve a desired outcome.  So we get to feel fabulous and smart with a budget!  In addition, as we prepare the budget it makes us slow down and focus on what probable business expenses we'll face in the coming year so those issues don't show up as an unwanted surprise. 
2.     
      Cash Flow.  Which once again sounds so boring and isn't.  It’s really fun to have enough money to pay all our commitments in a timely manner without struggle.  With a budget we can identify cash flow shortages and determine when outflow is greater than revenue and make allowances. 
3.      
           Funding.  If we're looking to find money for our business from just about any source (family, credit union, microlender, etc.) they are going to ask for a budget.  How would they know if we could make the monthly commitment if they can't see a budget?  Looking for angel financing?  Same story.  And it’s not entirely about repayment – a budget indicates you're serious about the business and you put success systems in place because you expect victory.                      

Not sure how to create a budget?  Totally get it – for years I didn’t know how to create sound financial projections or budgets either.  I think this article may be helpful:  http://smallbusiness.intuit.com/news/Achieving-sales-&-profitability/19283950/Creating-a-Budget-for-Your-Small-Business:-The-Basics.jsp

If you still have questions, post it and I'll respond. 

And if I'm uncertain I’ll ask Ardra to respond.  

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