pedrocampos

Member
Joined
Jul 29, 2017
Messages
71
Points
18
Ok folks, the dictionary has is the thing right, as it says that a budget is an expected income and expense. That`s where the problem is because you can not predict anything in a budget and things can happen to you or to your business that you simply don`t expect.
You can't predict every single item that you put in a budget and you are limited by your expenses, which makes you feel contracted.

So what`s the solution to this problem?
It`s simply to not have a budget. Instead, you need to shift your focus to producing more income rather than be stuck in the strictness of a budget, by putting the majority of your attention on getting revenue and not worrying so much about the expenses, and by this I don`t mean that you are not gonna care about the expenses... you are, but spending most of your time producing income, rather than using it in creating expenses.

I invite everyone to give his opinion on this topic. Thanks!
 

DakotaJ19

Member
Joined
Aug 28, 2017
Messages
8
Points
3
I think I understand the point you are trying to make--running a business is full of unexpected things so instead of creating a budget that is going to inaccurate just focus on creating more income. However, it's not something that I could put into practice. I like to have a budget, even if it is going to be adjusted, so that I can manage the present and plan for the future.
 

VirtualGlobalPhone

Moderator
Joined
Apr 22, 2016
Messages
1,029
Points
83
Hey @pedrocampos , nice topic.

The business moves of going ahead or going backwards or waiting is purely based on "RISK". Which simply means "Budget" is evaluated based on the RISK one willing to take.

Imagine this : The BUS is the "RISK" , the passengers are "Free Will", "Budget", "Guts", "Passion", "Love", "Trust", "Faith", "Believes" to name a few. Driver is you ...

Best wishes...
 

mentrabi

Member
Joined
Aug 22, 2015
Messages
21
Points
3
The public perception of entrepreneurs being risk takers is flawed. We need to be risk adverse, the point is to make more money than what you spend. If you start out in the hole it's hard to get out. See
Tesla
Twitter

As long as you have a pulse on your roi, go to town!
 

Gin

Member
Joined
Aug 17, 2017
Messages
73
Points
18
I have heard that most businesses fail due to poor financial management and finance is the backbone of every home and business. I prefer working with a budget for at least knowing my biz purchasing power vs not knowing.
 

pedrocampos

Member
Joined
Jul 29, 2017
Messages
71
Points
18
Another reason why most businesses fail is because the CEO`s are more worried about making a sale than bringing value to the customer.
 

VirtualGlobalPhone

Moderator
Joined
Apr 22, 2016
Messages
1,029
Points
83
because the CEO`s are more worried about making a sale
Agree with you. probably because not everyone follows what they really love doing. they follow "sort of" something already doing good in search of "money" which eventually fails them.
 
Joined
Jul 2, 2017
Messages
144
Points
43
A budget is a strategic baseline against which a business is managed. An element of any good budget baseline is a management reserve, controlled by executive management and intended to be justified before allocated to a new work scope, and unanticipated event or an occurrence outside the accountable manager's control.

The baseline is then adjusted to reflect the real world at time now. Budgets are a management tool, not a final outcome.

SMALL BUSINESS FEDERAL GOVERNMENT CONTRACTING (SBFGC): EARNED VALUE MANAGEMENT SYSTEMS
 
D

Deleted member 4061

Instead of no budget, I like to think about goals-based budgeting. It's where you allocate to a few goals, then once those goals are funded, everything else is extra/discretionary.

Business goals might be:
  • Taxes
  • Reserve / emergency
  • Marketing
  • Purchase or maintenance of equipment
  • Retirement plan for owner
  • etc.
Once you have the goals funded, anything above and beyond can be used (or saved) for whatever. Then you don't have to specifically allocate every dollar. Just meet your goals (or use them as a target).

This is what Ramit Sethi calls "guilt-free spending".
 
Top