Jesse Mecham, founder of software budgeting service You Need a Budget (YNAB), and Mark Butler, a virtual CFO who helps a businesses of all sizes manage their finances, join together to talk about the money issues many small businesses face, and strategies for addressing them. Today, they apply YNAB's four rules of budgeting to the small business, starting with Rule #1: Give Every Dollar a Job.

By giving every dollar a job, businesses can not only create reserves for unforeseen expenses and avoid cash crunches in difficult times, they can also plan more effectively for growth. Without a clear job for the dollars in your business, it's easy for business owners to fall into the trap of never thinking they have enough cash in reserve. Whether it's hiring a new employee, buying new equipment, or making some other large capital expenditure, many businesses get frozen in the mindset of thinking they need just a little more margin of safety in their reserves before making the next growth move. By giving your dollars specific jobs, as Mark explains, it becomes much clearer when to execute growth plans.

Look forward to more Beginning Balance shows every Friday!