I’ve talked about the ways you could turn your beliefs about your business budget on their ends and learn to love it, not loathe it.
I know what you might be saying. “Joe, I don’t even know where to begin.”
As with a great many things, I can tell you the key is to start simple.
Get as basic as you possibly can.
For inspiration, I found it in of all places- my son’s bedroom.
Awhile back, we bought this little piggy bank arrangement for him to teach him the basics of handling his money. It has three sections to it.
Spend. Save. Share.
Every time he gets an allowance, or gets a buck or two from Grandma and Grandpa, he needs to allocate the funds between the three banks. Spend, save, and share.
Seems like a good concept for someone in elementary school, but how can this help with your business? Well, this is how you strip the budget process down to its simplest pieces.
Once you know what is coming in, what do you do with it?
Spend it: This is how you run the day to day business operations. If you have a website, this is your hosting, your internet connection, your domain registration. Do you have a VA? Maybe other contractors for social media, web design, or content generation? These are the “spend it” items in your business. In a way, you’ve committed to them and they are part of the everyday movement of the machinery of your business.
Save it: This one might not immediately jump out at you, but it is so, so important for the growth of your business. However, personal finance gurus have kind of stereotyped saving as stuffing your dollars in a shoebox or burying it in the backyard so you have it on hand for some disastrous calamity. Yes, preparing for some unfortunate event such as losing a big customer is smart. However, the real reason you need a “save it” bucket is to grow your business.
Let’s face it, as a solopreneur you are probably generating ideas in your sleep. At some point you are going to have an epiphany for a killer project and you are going to need to fund it. That’s why you save. Get invited to a high end mastermind that will change your business? That’s why you save.
Share It: For my son, this is his giving fund. We teach him to share with those less fortunate than him. For our businesses, this doesn’t necessarily need to be a charitable donation, although it can be if you are building that type of mission into your profit model.
As I mentioned in the past, solopreneurs have their burning “WHY’s” behind their business. These are the things your “share it” bucket needs to fund.
It can be internal (like breaking free from a 9-to-5) or external (helping those in need), a portion of your business income should go to this. Otherwise, you can start to lose connection to the very things that drive you to succeed. Budgeting with this in mind makes you have intent towards fulfilling your why as opposed to making it an afterthought after you have paid all the other bills.
Don’t get me wrong, there’s a lot more to the budgeting and planning process than these three simple buckets. Yet, if you start your planning by keeping things at a very high level, you will find a great path to avoid overwhelm. I mean, it got my 8 year old son to self fund an (almost) new iPod after all. Besides, I’m a big proponent of making progress 1% a day.
Slow and steady wins.
Just get yourself into the mindset of budgeting with intent instead of treating it as some balancing act where the inflows must equal the outflows.
It doesn’t need to be so mechanical, and it can actually be downright rewarding.
Have a passion for your business, but don’t know where to begin with your accounting? This can help.