I am really passionate about businesses creating a budget, but I hear a tonne of excuses why people can’t set themselves financials goals.
In today’s episode, I share how to set your money goals with confidence and why every business should have a budget.
HINT: It helps you make more money!
In this Episode:
02.39: Why you should create a budget and plan your money goals
06.08: Knowing where to start without getting overwhelmed
08.20: How to take the worry out of ‘getting it wrong’
10.02: Why missing your money goals isn’t the end of the world
If you’ve been a listener of the podcast for a while you’ll know that I am really passionate about businesses creating a budget, but I hear a ton of excuses as to why people can’t set themselves financial goals in their business. In today’s episode, I’ll be sharing how to set your money goals with confidence and why every business should create a budget. Hint, it’s because it helps you make more money. This episode could be a game changer for you so make sure you stick around.
Hello and welcome to The Clare Wood podcast. This is your weekly dose of all things money to help you intentionally create a profitable business and a life you love. I have the difficult conversations about money so you can make more money with ease. Each week, I share how you can use mindset and the practical foundations of finance to elevate your earnings without sacrificing the things that are important to you, because you can and should be making more money.
If you love the learnings from today’s episode, make sure you check out my brand new course that is launching very soon called The Profit Academy Foundations. This course teaches you everything that you need to know about managing your business financials in an easy to understand way. Doors are opening within weeks so make sure you jump on the wait list for the course via the link in today’s show notes.
One of the most common excuses I hear for not creating a budget is that there’s no point, and people might think this for a couple of reasons.
- They don’t understand the value of creating a budget.
- They just don’t know where to start.
- They’re worried they’ll get it wrong.
- They feel embarrassed that if they set themselves financial targets or create a budget that they will miss the goals they set for themselves.
So these are the top four excuses I’ve heard and today I want to break these down and show you that every business should create a budget. And I’m also going to show you how having a budget in place helps you to make more money.
So why bother setting money goals? Why bother creating a budget? Well, it comes down to the old saying, if you fail to plan, you plan to fail. I think of a budget like a roadmap to where you want to be.
A budget is not just about setting a target, like for example, I want to hit 50,000 or $500,000 of revenue in a year. It’s actually breaking down how you are going to get to the goal as well. There are lots of different ways and timeframes over which you can create a budget, but for small to medium size businesses I think it’s appropriate to set a 12-month budget and to break it down month by month and by category of both income and expenses.
In my upcoming course that I mentioned earlier, The Profit Academy Foundations, I’ll be teaching you exactly how you can create a budget for your business. So if after this episode you can see the power of budgeting, make sure you jump on that wait list so you don’t miss it when the doors open.
Why you should create a budget and plan your money goals
So let’s come back to the reasons why you should set yourself money goals and why those excuses I mentioned earlier just aren’t valid. The first excuse that I hear a lot is that business owners can’t see the value of setting goals and of creating a budget. A budget is so powerful. It’s a roadmap for getting you from where you are to where you want to be. From my experience as a coach and mentor, many business owners are just winging it. They don’t know how much money they need to make to cover all of their bills. They don’t know how much tax they need to pay. They hire team members or join courses on a whim. The number of times I’ve heard, “I’m going to hire someone” and I’ll ask the question, can you afford it? And the response I often get is I’m not really sure.
Here’s the problem with winging it, it could massively backfire. If you don’t have enough money to pay your new team member or yourself, it could end really badly. Imagine not having enough money to pay your team member or to pay your own bills. Not cool. But when you have a plan, you can invest with confidence. You’ll know that you can afford your taxes and your bills and the new hire, course or whatever it is that you are looking to invest in. You have a plan. A plan gives you clarity and confidence. And when you have clarity and confidence, this translates into you being confidently able to invest back into your business, which in turn massively increases your chances of success.
So hopefully I’ve shown you a pretty damn strong case for why you should set money goals and a budget in your business.
Knowing where to start without getting overwhelmed
The second reason why people don’t set a budget for their business is they don’t know where to start.
This might be something that feels very real for you, but I want you to think about anything big that you are wanting to achieve in life. You won’t get closer by not taking steps towards it. If you set yourself a goal that you want to run a marathon and you overthink it, there are so many different things you could think about. You could be worrying about buying the right shoes, hiring the best marathon trainer around. You’d be thinking about the step by step game plan for running 42 kilometers. You’d be thinking about what foods you need to be eating on race day. You might have been thinking about what clothes you need to wear on race day, how you’re going to do a way halfway through your race. There’s so many different things and you’d probably end up feeling pretty freaking overwhelmed. But if you start really simple, perhaps you download a program of how to build up your running fitness and then you start going for runs then bit by bit, you’ll become a better runner and then you’ll step into your next level and your next level until eventually you are a confident marathon runner over time.
The point I’m trying to make is that with anything you are wanting to achieve in life, you have to start somewhere. Your first budget doesn’t have to have 50 spreadsheets with all these interconnecting links. It can just be a very straightforward plan. And as your budgeting skills improve, you’ll get better over time.
This is the thing with setting your money goals or creating a budget, just because something can feel a little bit overwhelming doesn’t mean that you should avoid it. My tips, start small, invest to work with experts to teach you the shortcuts and invest the time into learning the process and just getting started.
How to take the worry out of ‘getting it wrong’
The next reason that business owners do not set money goals is because they’re worried they’ll get it wrong. This is another big fear that I hear from business owners that they’re worried they’ll set their budget and it won’t be right. They’ll say, “Well, I don’t know how much I’m going to earn” or “What if I don’t land three new customers next month?” Or “What if I put this much in my budget and it ends up costing me more than I’d planned?” This is where you need to have a mindset shift when it comes to your budgeting and planning sessions. It doesn’t need to be perfect. Trust me, I have worked for some huge global corporations and they’re guessing just as much as you or me. I mean, think about it, a few years ago no one would’ve predicted a global pandemic and the impact that this would have on their business. During the pandemic, some industries experienced massive growth and other industries experienced massive declines, but I can assure you no one would’ve built that into their budget for the year.
The point I’m trying to make is this, a budget doesn’t have to be perfect. Your goals don’t have to be perfect. They are just the best guess with the information you have available at any point in time. Don’t try and be a perfectionist in this process, just give it your best, most educated shot.
Why missing your money goals isn’t the end of the world
And this leads me to another big reason of why people won’t set money goals, which is that they are worried that if they do set targets they are going to miss them. This is related very closely to the last thing that I spoke about, about not getting it right.
I’m a mentor, I’m a coach, and my job is to help business owners to hit their big and audacious goals. But here’s a massive myth about scaling, that people hit their goals all the time. The truth is growth isn’t linear. Sometimes we hit our goals, sometimes we smash our goals and sometimes we dismally miss them. And this isn’t just small business, it’s been the same for some of the massive companies that I’ve worked for, too. Sometimes we’ve had months or even years where the big corporate firms I worked for have completely and utterly bombed on their sales results. This is where mindset meets practicality in business.
Just because we have a fear that we are going to miss a goal in business doesn’t mean that we shouldn’t set goals. Mindset is such a powerful part of your long-term success in business. It’s having the belief that even if you do miss your goals that you still have potential to get them over time. Having that resilience and persistence to keep on going and to continue to dream big. Because if you have faith and you take aligned actions, you will get there.
So to sum up today’s episode, a lot of people have a resistance to setting money goals or a budget in business because they think they need to get it right. They’re worried that they will set goals for themself and that they will miss them. But here’s the thing, there is massive power in creating a budget. And I believe that creating a budget helps you to hit your goals much faster. I totally understand that a lot of business owners, particularly if you’re not experienced in the world of finance, might not know where to get started, but anyone can learn how to create a budget. You simply have to get started.
As I mentioned at the start of this episode, I am launching my brand new course, The Profit Academy Foundations, very soon. Inside this program, I will be showing you step by step, in a really easy to understand way, how to set yourself money goals and how to break it down into a month by month budget. So if you would like my help in that process, make sure you jump on the wait list via the link in the show notes for today’s episode.
Thank you so much for tuning in today and for sticking around. I hope this episode has inspired you to get out there, set some money goals for your business and to break it down into a budget because I believe it just could be a game changer for you in business. Have a fab week and I’ll chat to you next week.
I hope you are feeling inspired and excited about what is possible for you when it comes to money. It takes a lot of time and energy to create a podcast so I’d be very grateful if you could take the time to hit subscribe, write me a review and share any of your favorite episodes with your audience on social media. The more people that we can reach, the more people we can empower to earn more in their business because you can and should be earning more money.