Beginning Balance

Mark and Jesse ponder a question -- is there anyone who doesn't need a budget? What about a person in the upper, upper crust, that has hundreds of millions or even billions to their name? Or what about someone who simply has very few desires, that are easily covered by their existing cash flow? The discussion quickly gets philosophical!

Mark Butler CFO

https://markbutler.com

You Need a Budget

https://www.youneedabudget.com

Whether or not the successful admit it, luck plays a role in making things happen. Having the right at the right time, a chance meeting with the right person -- these factors could be called luck, and they matter in the world of business. But is that all there is to success? There's a saying that "luck is the residue of design," a nod to the influence of luck but also a reminder that without intelligent planning, execution, and effort, luck is wasted.

Mark Butler CFO

https://markbutler.com

You Need a Budget

https://www.youneedabudget.com

Mark and Jesse discuss some of their favorite books... and some of their not-so-favorite books. They both love to read books, especially about business, but they also admit a danger in the practice. It's easy to confuse reading books, or blogs, or listening to podcasts, as an act of creation, as if doing so is actually improving or advancing your own business. Occasionally they may offer insight, but even that is not an act of creation for the business -- it's only useful if you use the information to inform your next move in the business.

So, a word of caution! Be careful what you read, but more importantly, be careful that you are balancing your reading with action, actually going out and doing.

Mark Butler CFO

https://markbutler.com

You Need a Budget

https://www.youneedabudget.com

Business owners have a variety of reasons for starting and then continuing to operate their business. For many, it's to make money, or to make more money. Or, perhaps it's the security that comes with being your own boss. The desires that drive business owners can change and evolve, too. Some people endeavor to solve complex challenges, or to move the needle on a large industry or societal problem. Whatever the reason, Mark and Jesse argue that business owners need to be in touch with their reasons for owning the business, and continuing to own it, or risk falling prey to the three lies about cash discussed in the previous episode.

Mark Butler CFO

https://markbutler.com

You Need a Budget

https://www.youneedabudget.com

There's something about business spending that seems special, more important or impactful than personal spending or at least worthy of some exemption from normal budgeting practices. Maybe it's the large amount of money that typically flows through a business (large compared to the business owner's personal salary or distributions), or perhaps it's a believe that any ROI business spending generates is better than mere spending. Whatever the reason, business spending often gets less scrutiny than personal spending, and business owners need to be aware that the same mental gymnastics they use to justify personal spending can happen in the business. Budgeting is for businesses too!

Mark Butler CFO

https://markbutler.com

You Need a Budget

https://www.youneedabudget.com

Mark and Jesse answer a listener question: how do you pull the trigger on a big ticket purchase? When you've budgeted for a large purchase, and accumulated the cash, it's hard to see that cash flow out of your bank account. Mark and Jesse discuss the psychology behind large cash purchases, and how to manage your emotions as a business owner.

Mark Butler CFO

https://markbutler.com

You Need a Budget

https://www.youneedabudget.com

Mark Butler and Jesse Mecham discuss how much business owners should share about the company's financial position, and more importantly, why context for the information is vital to fostering trust and goodwill with employees.

Mark and Jesse discuss the concept of "margin of safety" in a business, that is, building in cash reserves to your operating plan for when things inevitably don't work out like you forecasted. Whether your business has to absorb unexpected costs, or revenue is down for a period, or some other "unknown unknown," having a margin of safety in your business ensures that you have the resources to survive the business cycles and thrive over the long term.

It should be no surprise that a business with 100 employees has different management challenges than a business with 10 employees. At some point, managing the business becomes less about the idea that founded the business -- creating something that people like and want, product market fit, etc -- and more about solving the logistical challenges of scaling that business to grow. As Mark and Jesse discuss, those are two different skillsets, and few people excel at both. Understanding your strengths and weaknesses and building the right team around you can make a huge difference.

There's plenty of firms and consultants out there selling strategies and solutions for customer acquisition using partner programs, referral codes, and other internet based referral tools. They promise to be the "gasoline" that accelerates the fire of growth in your company, but do the results hold up to the promise? Is it possible instead to build a business where your main source of customers is simply referrals from other customers? Mark and Jesse discuss.

Mark Butler CFO

https://markbutler.com

You Need a Budget

https://www.youneedabudget.com