Budgets for growing businesses

I’ve been thinking a lot about budgeting and forecasting lately, especially now that we’re just past the year’s half-way point and especially now that the economy is starting to (slowly) come back to pre-recession levels.

One of the specific areas of budgeting I’ve been thinking about is the differences between budgeting at various stages of a business – from start-up to big business. I was really happy to find this series of posts by venture capitalist Fred Wilson.

The first post I wanted to bring to your attention from him is the difference between projections, budgets, and forecasts. In short, projections are long-term, multi-year “what could be” numbers; budgets are one year plans; and forecasts are intrayear estimations. Read Fred’s full article for more details.

Now, here’s the really hands-on part: Over a series of 3 posts, Fred writes the step-by-step way for small, medium, and large businesses to budget:

An early-stage company – with about 10 people – is his first example in the blog post “Budgeting in an Early Stage Start-Up Company“. In this post, he outlines what business owners at this stage need to think about, including people costs and building up some cash.

A growth company, according to Fred, in his article “Budgeting in a Growing Company“  has between 10 and 75 employees and is in a constant state of flux. It’s not a bad thing but you need to make some adjustments. One of the first adjustments is to start budgeting earlier in the year for the next year. Another adjustment is to take the sales managers’ budget and dial it back because it is usually optimistic. Fred rightly points out that companies of this size rarely hit their budgets because things are always changing.

In his article about “Budgeting in a Large Company“, Fred talks about the challenges of budgeting in a company over 150 employees. It’s similar in process to a growing company, he says, but far more involved. And another step companies can do at this size is start benchmarking their budget against others in the industry.

These blogs are a great read for any size of business looking to grow. Take the time and read them!

Jessica Routier, IAC-EZ

How to save the world

The world is in rough shape right now. We’re still licking our economic wounds when suddenly – BAM – there’s more oil blasting into the Gulf of Mexico than we can possibly manage… and it just keeps flowing and flowing. The world’s attention is focused on those two catastrophes because they are simply gigantic and not easily stopped.

As business owners, we can feel powerless when faced with what seems to be insurmountable issues that even large governments and trillions of dollars cannot correct. But nothing can be further from the truth! If there is anyone who can effect change, it’s the small business owner and his or her customers.

Small business owners represent millions of people and billions of dollars of influence and their customers represent even more. We can all step out and create change. So, if the two biggest issues right now are financial and ecological, where can we start?

Financial
Let’s start with some ethical, customer-service-focused, good old fashioned sales hustle. Let’s get out there and make sales, ethically selling our high value products and services to the people who need them. And, as consumers, let’s buy from others even if the price is slightly higher than we want to pay. Getting money into the economy is going to be the best thing for it and getting a bunch of money into the economy is going to skyrocket our personal, professional, and national economies toward better conditions.

On that note, here is a great article about good and bad profit – there is a difference! – and the few simple things you can do to make sure you are earning good profit.

Ecological
Individually, we’re not going to be able to cap the oil spill or reverse the trends happening there. But collectively, we can make progress elsewhere in the ecosystem to influence an overall change for the better. That starts with going green in our business. When we go green and ask our vendors to go green and buy green products and services, we’re making a significant contribution (in dollars and commitment) toward a better environment.

And here is a great article about green marketing; about turning your business from a regular business into a green business that can promote itself as an eco-friendly alternative.

Jessica Routier, IAC-EZ

Grow Your Business in the Recession

Some economists believe that we have passed through the worst of the economic storm and while it is still a long way to recovery, we can look forward to slow, steady improvements.

Be that as it may, “we’re not out of the woods yet” as my grandfather used to say. Some industries are still going to face some dark days, and some businesses are going to find the next months still quite severe. And, even though my research indicates that, unless there is some catastrophic news, we may be headed to calmer economic waters, we’ll still have to run our businesses carefully.

Here are some resources and ideas you can use to run your business more effectively during this recession:

Victor Mataraso, in his article “How to Grow Your Business: The 3 Key Areas to Invest” tells us about how investing in our marketing, customer service, and systems will help us to make it through. Read the article here.

Denise O’Berry, in her article “You Can Grow Your Business During a Recession” give us some really practical steps to take, including our favorite: a call rotation. These are easy to implement and sound ideas. Read the article here.

Aaron Hoos, a business writer and strategist who participates in our forums, wrote an article in January 2008 about the recession and what to do about it. His article “The Coming Recession and 7 Ways to Prepare Your Small Business” gives readers some strategic ways to create a more successful business. Read the article here.

Rhonda Abrams, from the Hartford Business Journal Online writes in her article “Growing Your Business In a Recession” that businesses can do a number of things including focusing on the small customers of large businesses. Read the article here.

And although this article isn’t specifically about growing a business in a recession, it is a fascinating interview with an angel investor (who invested in Yahoo, Google, Cisco, and Paypal… so he knows what he’s talking about). The last paragraph of the article gives some fascinating insight into why he PREFERS to invest in businesses that start in a recession! Read the article here.

Jessica Routier, IAC-EZ