One of the great joys and motivations of owning a small business is freedom. You are free to make the final decisions. Free to move as quickly and decisively as you dare. And free to discard on a whim what bores you, slows you down or restricts you. And that’s exactly why small business owners often have no financial discipline. It doesn’t feel good or conform to the dream that they pursued into business ownership. And it certainly takes more time and attention to mind-numbing detail that some are willing to invest.
But another reason may be a lack of familiarity with bigger-company tools like budgets. Many small business owners build their operations after having worked as an employee in another firm but not necessarily as a manager with financial responsibilities (and presumably with the training or exposure to standard tools).
Despite the pervasiveness of QuickBooks in small business, our experience at CEDF is that few owners, without prompting, use the basic budget-tracking tools built into the desktop or online versions of the program. It’s a shame because a little planning goes a long way to ensuring profit.
For those simply stuck on the bigger processes involved, Intuit provides a nice tutorial laying out the simple steps to arriving at a workable budget. The article is a good starting point before examining exploring the budget tool itself, for which there are many online articles and discussions.
As Yogi Berra has been quoted as saying, “If you don’t know where you are going, you’ll end up someplace else.”