Episode 182 - Taming the Financial Beast

 If you've ever stared at your finances and wondered, where did all the money go? You're not alone. Managing cash flow, dealing with unpredictable expenses, and trying to make sense of a budget that just doesn't work can leave you feeling stuck and overwhelmed. But consider this, a budget isn't a burden, it's a tool.

It's a way of telling your money what to do instead of letting it run wild. Today, let's uncover the steps you can take to control your finances and set yourself up for success. This is the Budding Entrepreneur Podcast.

Good day and welcome to the Budding Entrepreneur Podcast. I'm your host, Randy Bridges. In each episode, we dive into practical business strategies that you can put to work in your business right away.

We also focus on inspiring stories from leaders who are shaking and making things happen in their industry. It's all about giving you the tools and insights to take you and your business to the next level. So get comfortable and let's jump right in.

All right, all right, we are on episode 182 of the podcast and today is Friday, January 17th, 2025. Today's topic is one that impacts every business, whether they're just starting out or scaling up. It's all about managing your finances and our title of this podcast is Taming the Financial Beast, Creating a Budget that Works for You.

Now last week, we talked about scaling your business without losing control. Part of that scaling process involves making sure your finances are in order, which ties us directly to today's topic. Let's consider building a budget that helps you take control of your cash flow and plan for the future.

If you're feeling frustrated with unpredictable finances or overwhelmed by ineffective budgets, you're not alone. The good news is there's a way to change that and that is what today's podcast is about. So here's what we'll be covering today in our agenda.

We'll be talking about our weekly quote this week from Dave Ramsey. We'll talk about why financial chaos happens and how it affects your business. How you can reframe budgeting as a tool for freedom and control.

The benefits of creating a smart budget. And actionable strategies you can take to build and maintain a budget that works. Let me start the tone with our quote of the week.

A budget is telling your money where to go instead of wondering where it went. This came from Dave Ramsey. Now, if you're not familiar with Dave Ramsey, he's a financial expert who's helped millions of people take control of their money.

His no-nonsense approach is rooted in practical strategies that anyone can use. And we're going to borrow a bit of that wisdom for today's discussion. First off, let's talk about why financial chaos happens.

Financial chaos is something most business owners have experienced. It often starts small. Maybe it's an unexpected expense that throws off your cash flow.

Or you overspend on something you thought would drive revenue, but it didn't. Before you know it, these small hiccups snowball into constant stress. It's horrible.

I know it. You know it. We all have been there.

It's a terrible place to be. And the problem here isn't just the money. It's the lack of clarity.

When you don't know where your money is going, it's impossible to make confident decisions. A lot of business owners I know have worked to find themselves putting out financial fires instead of focusing on growth. One of the biggest culprits? Lack of priorities.

Without a clear budget, you might end up spending too much on things that don't move the needle. Like overinvesting in software you rarely use, or underestimating the cost of hiring a new team member. Remember there's always overhead to that employee, and you have to count that into your numbers.

I've seen this happen firsthand. I actually had no idea why my business was struggling financially, because we were bringing in great revenue. And I had a partner at the time who was handing me the numbers, but the thing was those numbers weren't making sense.

Now when we dug deeper, we found out that the expenses were at that time unorganized. They were good, but they were left over from a previous company that we had both gone into, and we were spending a lot more money than we had anticipated. We had no clear plan for the money that we had, and a lot of dollars were simply slipping through the cracks.

So let's avoid that if we can, and start talking about budgeting as a key to freedom. Now when most people hear the word budget, they immediately think of restrictions. But that's the wrong mindset.

A budget isn't about saying no. It's about saying to yes, but only to the things that truly matter. When you create a budget, you're giving yourself the power to make intentional choices.

Instead of wondering where your money went, you're telling it where to go. And that kind of control is liberating. I know that when my partner and I finally figured out all of these things, and we started looking forward down the road, and streamlining things we didn't need, it gave a lot more perspective on where we were headed, and what we could do as a result of it.

A budget is your map. It ensures you're putting resources into what gets you closer to your goals, and not into distractions. So what happens when you take control of your finances? I think of it as the benefits of a smarter budget.

A smart budget gives you three primary benefits. Number one, clarity and predictability. With a budget, you know exactly what you can afford and when.

This clarity eliminates the financial guesswork, and it allows you to plan ahead. Number two, growth opportunities. When your finances are stable, you can confidently invest in your own growth.

Maybe that's hiring a new team member, or launching a marketing campaign. You know you have the funds to seize the opportunity without fear. And number three, and this is a biggie, stress reduction.

Perhaps the biggest win is peace of mind. Instead of scrambling at the end of the month, you'll know that your finances are under control. This lets you focus on what you do best, running your business.

After all, isn't that one of the most important things for you to do? You bet it is. So let's talk about crafting a budget that works. Now building a budget doesn't have to be complicated, but here's how you can get started.

We're going to keep it really simple here. Start with revenue forecasting as a first step. Look at your past income to estimate future revenue, and you might have to go all the way back a year.

There are a lot of vendors that I have that only bill once a year. So if I'm only counting what I did in the last three months or six months, I'm going to miss all of those things that are coming down the road. And by looking at your past income as a whole, it helps you set realistic expectations for what's coming in.

Step two, identify the fixed and variable expenses. Now fixed costs like rent and payroll, they tend to stay consistent. But the variable costs like supplies or advertising, marketing, all these different other things, many times vendors that only bill occasionally, these can all fluctuate.

And knowing the difference helps you prioritize. Step three, allocate money for your priorities. Think of your budget as buckets.

One for essentials, one for growth, and one for emergencies. Do not forget your rainy day fund. I have a friend who started his financial control many years ago, and he used a tool that was an online download called You Need a Budget.

And what it did was assigning each dollar a job that it had to accomplish. And once it accomplished the job, now there had to be a return to come back in. So these types of things are very common, but you definitely want to look at these allocating for priorities, giving your dollars a job to do.

And step four, revisit this monthly. Your business is not static and your budget shouldn't be either. Adjust it regularly to reflect changes in revenue and or expenses.

So let's look at some practical nuggets for budgeting success. Here are three strategies I found helpful. 

Anytime you're making a decision about money, use the 24-hour rule before making any big financial decisions and many smaller ones too. Sleep on them. It avoids impulse spending. 

Two, the 1% rule. Set aside 1% of your revenue each month for unexpected expenses. It's a small cushion that can save you from big headaches down the road. 

And number three, embrace technology. There are a lot of tools out there that can make your tracking of your expenses and setting your budgets much easier. 

But I want to lean back to something that my tax person told me. Every business decision is ultimately a tax decision.

So understand in those three that taxes play a big role in how you might move forward. Let's take a sneak peek at next week. We're diving into from reactive to proactive.

Mastering time management. Yet another tool to help you in your dashboard of running your business. We're going to consider how to move from constantly putting out fires and reacting to the issues that come about, and talk about how we can transform your schedule with proactive time management.

That's it for this episode. I hope you picked up some valuable insights and maybe even sparked a few new ideas. If you want to keep the conversation going, or maybe even explore partnerships, don't hesitate to reach out.

And hey, don't forget to subscribe, leave a review, and share this with someone who needs to hear it. The steps you take today could be the start of something big tomorrow. For the budding entrepreneur, I wish you the best in your health, your wealth, your business, your family, everything about you.

Take care, and we'll see you back here next week.