As we head into the last few months of the year, we thought it would be helpful to discuss budgeting and putting your business plan into figures. You may have completed some planning for the new year during this last quarter and we want to talk about converting your business plan into a meaningful budget. Our co-host to discuss this topic is one of our partners and our firm’s budget expert and cash flow queen, Jaime Staley.

What we cover in this episode: 

  • 01:40 – Strategic planning refresher
  • 03:26 – Budgeting mindset offers awareness
  • 10:18 – Budget = business plan expressed in numbers
  • 17:19 – What can you do with a budget?

Strategic planning refresher

As we head into this last quarter and we are planning our strategy and execution for next year, many folks don’t know or don’t believe in the true impact of budgeting. Most members of your company should understand what the budget is and may understand your goals, but it’s really important to establish a budget on paper and look at that from an annual and monthly perspective, as well as keep track of it throughout the year. So putting pen to paper, creating an actual budget, and monitoring it over the course of the year is what we’ll be chatting about more today. 

Budgeting is a very crucial topic when it comes to your overall business plan and strategy, and we covered this topic in Episode #04 of our 10-part Strategic Planning Series. So if you’re interested, you can go back and revisit that episode to learn more about strategic planning and how that relates to your budget. We actually offer a freebie in that episode as well, which is a budgeting template that you can download for free. Today we’re going to be talking about some refreshers, and again, bringing it back to the business plan and what you should be looking at when it comes to annual planning, as well as some good reminders for your budget.

Budgeting mindset offers awareness

Jaime stated, “Budgeting is really important. And I think a lot of businesses might have the mindset of, ‘I’m too small to create a budget’ or ‘I’m the only one who really needs to know it.’ But if you have even a small team, it’s important to get everybody on the same page. It makes them feel included and understand why you may be making decisions regarding spending and expenses. So it’s really important, especially for your leadership team, to be part of discussions and understand why you’re asking them to do certain things or why they can’t spend money in certain areas. Providing a budget on paper allows for the transparency necessary to communicate what is happening company-wide in relation to the goals, strategy and tactics required. Once a budget is released, everybody can begin moving in the same direction for the same goals.

Budgeting does not have to take hours and hours, or months and months, regardless of the size of your company. Having open communications with your managers, and reviewing your goals and your performance over the past year is invaluable. A good place to start is by setting your goals and deciding where you want to be in the upcoming year, referencing your past performance. 

Jamie provides her own anecdote from personal experience about budgeting, “Right out of college, and I graduated with my CPA, right? All this financial background and I’d moved out on my own, and I didn’t really have a lot of history of living life. So when I graduated, I would run to the ATM every time I ran out of cash, get a hundred bucks and keep living my life. I needed the money for the train… lunch, to go shopping and do all those things. Well, when it came to the end of that next year, I was looking at my savings account, and I was like, wow, my savings account hasn’t really gone up. That’s weird… I have a job. I should be making money and then… when I started to look a little closer, I was like, oh wow. I spend almost all of the money I make every month.” 

A budget gives you the awareness to understand if you are on target or over/underspending. Budgeting for your business is like setting those smaller personal budgets. Jaime stated, “All I did was start to say, hey, I’m going to take a hundred dollars. And I set that as my budget and some weeks that was fine. That was good for some weeks, but other weeks it was not. By that Wednesday, I thought, oh shoot, I’ve already spent that money. So I learned to spend it differently.” Even if you don’t hit your budget every week or month, it’s giving you a reference point to understand where you are, where you should be, and how close you are to achieving your goals. Having the mindset and awareness of your budget will help you make better business decisions.

Budget = business plan expressed in numbers

As a business owner, what should you discuss when sitting down with your controller or CFO when it comes to budgeting? You may have a fantastic, solid business plan in place, but your CFO should be helping you tie in a budget that helps align your tactical plan for execution to your overall strategy. 

Start by thinking about your revenue targets for next year. Ask yourself, is that a reasonable number? Are you realistically going to achieve that, given your current resources? Your estimated sales, minus your estimated expenses will equal your profit (or loss), and you have to start there. Do you have plans in place that are in line with the proposed budget and goals? You then have to assess if those plans are realistic. If you don’t have any real plans in place to reach those goals, such as bringing in more clients, selling more, or increasing prices, then does the plan really line up with the goals? And the reverse should be discussed as well by asking probing questions such as, “Are you sure the number is high enough?” Your CFO should be challenging you by asking questions about your goals, current operations and assessing if you could be bringing in more revenue by doing certain things like increasing prices, or cutting expenses, etc.

Looking at the historical picture and having these pointed discussions can lead to the development of an estimated budget, which can then be fine-tuned and used to match your business plans. Fine-tuning the budget can be done by asking additional questions such as “Are there areas that need to be increased or decreased for different expense buckets?” or “Do we need to spend more or less for marketing, or labor, or any other area in order to reach our goals?” Being able to make the adjustments and pivot to match the budget to the plan is the goal for these discussions. Being flexible and knowing what adjustments may need to be made to reach your goals that you’ve laid out in your business plan is invaluable to your success, and your budget then becomes your business plan translated into numbers. 

What can you do with a budget?

Most of your budgeting is done in the fall, or 4th quarter, for the upcoming year, and it’s important to remember that you should look back a full year to do some predictions and map what could happen for your next 12 months. Budgeting for a whole year in advance can be difficult to get exactly right because you are making your best estimations for 12 months out, and things change so frequently. 

Once you create the budget, do your best to stick with it rather than changing it from month to month. “I typically ride with that budget for at least the first quarter”, stated Jaime. There are usually quite a few changes in the first few months of the year, and you don’t want to be reassessing constantly, so perhaps you reassess by mid-year and see if you’re still on plan. Jaime suggests this tactic because it then allows you to “stop and say, okay, this is what actually happened for this set of months. We know we’re not going to hit this number, or we know we’re going to go well above this number. So we need to adjust and say hey, we’re going to take the next six months and adjust it and create a projection for what we think is going to happen.” What it’s kind of like is having a revised budget, and as we usually call it in the financial world, a projection or reprojection. In certain accounting systems, you can also set up a separate projection, and do comparisons to actuals that way to get a good picture of what is happening and is invaluable to helping owners make good business decisions. The ability to be flexible and make changes has never been more important considering the past year during the pandemic. Having a strategy and a budget down on paper has given many of our clients a leg up from someone who doesn’t have anything or anywhere to start from when determining how far off they were from their original business plan in these situations. 

Jaime stated, “So I think sometimes people like to dream big, right? We’ve got many people that are very entrepreneurial. And they say “we’re going to triple our revenue next year.” In these cases, it’s important to look at reality and historical evidence. This isn’t to say that you can’t experience large revenue growth, but you will need an extraordinary plan and ways to really leverage your resources. You don’t want to create disappointments across your team and the company for not meeting a big goal and have people working tirelessly for something that is unachievable. You want to be reasonable with your goals and be able to celebrate the wins when you do meet that goal you’ve been striving towards. You should always strive for that good balance in your budget and goals to get those wins and create that enthusiasm in your company, and that good balance should include looking at the resources that you’re utilizing to reach your goals, not just increases in the revenue projections. 

As the business owner, you might have all of these ideas, but having those concrete numbers in a budget for your management team, will help them manage everyone and communicate effectively with their teams. Establishing those benchmarks will help everyone reach that similar goal. You’re just communicating further, not only with a business plan, but with a budget, that these are the numbers and your monthly goals, so they know what management is going to be checking on to reach those goals, and this is what we’re measuring. Your budget helps to communicate all of that information full circle, and it gives the whole organization another tool to be able to help the business achieve the goals that everybody is striving toward. 


The importance of having a budget cannot be understated. Knowing where you started, where you want to go, and the awareness of whether you’re meeting your goals from month to month are the cornerstones of your business plan. Your budget brings all the numbers together, so everyone has a clear vision of the goals they are striving for to make the business a success. Your budget is a tool you should be using every month to see where you are trending, and it’s necessary for you as an owner to make smart business decisions. Knowledge is power, and a budget brings you that knowledge. If you are going to have any struggles with your business, your budget can also help you forecast them ahead of time. You’ll want to know as soon as you can so you can make corrections and steer the whole team in the right direction, and collectively reach your goals.

Don’t forget to grab your free budgeting template when you check out episode #04: Strategic Planning – Budgeting. The whole series is a great resource to go back and listen to in order to help with your end of the year and strategic planning. If you are looking for a controller or CFO and you’d like to have some budgeting conversations and figure out what working with a CFO would look like, please feel free to reach out to us. We offer a FREE discovery call and you can sign up online, or reach out to us at 844.475.7272.


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