Every Business Needs a Budget, No Matter How Much Money You (Think) You Have
Playing fast and loose with money is for dilettantes, not entrepreneurs.
"Move fast and break things" was once the irrepressible mantra of Facebook, perhaps the most exalted tech company of the 21st century. As the thinking went, whatever toes (or civil rights) you step on during your path to profitability are fine, and the ends justify the means. For a business of any size working within a set budget, these words are a sure path to failure. While I'll never say that some rules aren't meant to be broken, as a general rule for growing your business reputation, it's discipline -- not a cheeky disregard for it -- that sets great companies apart from forgotten ones.
For my companies engaged in high-level consulting and software implementation work, staying on budget is a matter of existence. If I can't stay within the parameters that are set for my business and my team, we haven't done our job. I realize that not all businesses work this way, but knowing how to stay within set spending limits has concrete benefits for both professional and personal projects. Staying disciplined with your (or your client's) money is a skill that anyone would do well to develop.
Money always matters.
The metaphors we use to discuss money are fascinating and revealing. When we spend too much, we're "bleeding" it; when it comes unexpectedly, it's divine: "pennies from heaven." We even call it bread, the staple food of Western history. The English language has evolved countless ways that tell us that money is important. Knowing this importance, it defies belief that so many businesses spend it freely, as though it can never run out. That kind of attitude needn't ever develop in a business, and it helps to have experience in making the most of what you have.
I grew up in some rough neighborhoods across Hartford, Philadelphia and Detriot, where there was little money going around and not much coming in, either. I graduated from those streets to tough manual labor jobs with no guarantees in pay or benefits, and I had to break my back for every dollar I earned. I know the importance of keeping on a budget because it kept me alive in those years before I started my businesses. If you have the same background as me, you know why budgets aren't mere suggestions: because failing to follow one means you're not eating.
It's your reputation.
A fundamental part of the business reputation I've built is my ability to get projects done both on time and on budget. I know it doesn't sound like an enticing pull to grab people's attention, but delivering consistently in those two regards has provided a continual assurance that my company will be called upon again and again when high-demand clients have major needs. It's not an overly complex master plan, just a rock-solid ethos that backs up all the technical know-how my employees and I use to execute when our clients need us to.
When you're working for major organizations, you might be inclined to think they've got unlimited money to throw at you and your company's consulting projects. Even if their coffers are nearly bottomless, the last thing they want is to work with someone whom they see as frivolous with their money. They didn't get that rich from spending their money carelessly, especially not on vendors and contractors.
Demonstrate your discipline.
It's not only when it's someone else's dime that sticking to the budget is vital. Keeping to your own business's budget is a basic task of financial wellness. It's also a signal to investors or potential stockholders that you've got a hold on what you're doing. Making an impact is one thing, but the best impression you can give to clients and competitors is that your word, represented by your reliability, is unbreakable.
It seems like we've heard the term "brand" more than ever in the past decade or so. The phrasing, used in advertising for decades, has entered the popular consciousness as the value of good messaging grows in relevance. What good, then, is a brand that clients and customers associate with poor money management habits? Since we acknowledge the value of having a good name, it follows that being smart with the money you're given keeps that name good. It's more than looking good, it's about having a name that can be trusted.
Creativity where you least expect it.
Staying on budget doesn't need to be a burden. In fact, it's a creative opportunity if you treat it like one. Yes, money is the lifeblood of business, but that doesn't mean you'll die without a certain amount of it. Innovation is nearly simultaneous with up-and-coming businesses, one reason being that they can move with fewer constraints than industry giants, but another is that they know how to make more out of less.
A low budget, when growing my business, meant flexing every creative muscle I had to solve problems. It meant I couldn't rest, and that I could never get fat and complacent. If you're not afraid of the work, or the potentially painful decisions you'll have to make, making the most of your budget is the best exercise your business brain will get.
Fiscal responsibility might not make for flashy slogans, but moving fast and breaking stuff won't pay your bills. Whether it's money given to you or coming from your own coffers, the budget you live and work by needs to be taken for what it is: the numbers behind your business's existence. Playing fast and loose with money is for dilettantes, not entrepreneurs. If you're looking to make it in an unforgiving business world, start by keeping your costs in line. You'll still be able to move fast, but you won't break your reputation.