One of the most common questions I am asked is how do you develop a budget, especially if you are a new business and have no track record. The answer it is not easy. Budgeting is not just throwing darts at the wall and hope you hit something. When you are playing a game of darts you don’t just throw it, you actually attempt to aim at and hit the bulls-eye. I am not very good at darts, ask my children, I can throw a ball toward one person and hit someone else who is not even in the room.
Budgeting is more like playing darts with a magnet. If you magnetize both the board and the end of the dart they will try to find each other. Now this only works if you get in the vicinity of the board, throwing the dart in the opposite direction of the board will still not hit the board (unless it is a very, very strong magnet) budgets give you the board to throw at, and your work is the dart. Therefore budgeting is part science (basic number crunching) and part insight (educated guess).
I like this quote from Bob Taylor.
“Had we known how many years we had in front of us before we were successful at these budgets, we might have walked away from it. It’s probably better not to know because there is a certain staying power generated by the anticipation of success being just around the corner.” *
Budgeting helps generate the possibilities. Even if your budget turns out to be way off from the actual numbers, it gives you something to throw your dart at. It gives you a target. If you need help with your budgeting there are several templates available for free for Microsoft Excel. We also offer a customized budgeting spreadsheet that we will tailor just for you. Drop us an e-mail at [email protected] to find out how to get your customized budgeting spreadsheet.
*Taylor, Bob (2011-02-04). Guitar Lessons: A Life’s Journey Turning Passion into Business (p. 49). John Wiley and Sons. Kindle Edition.