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Topic: Budget

What Is Zero-Based Budgeting and Should I Use it for My Business?

Budgeting, budgeting, budgeting! It seems like we talk about it a lot, and yet even though it’s one of the most important processes for any business—big or small—to undertake, it is often one of the most daunting and difficult tasks to refine… Which is why many organizations default to using the prior year’s budget as a starting point for building the budget for the new year. This method of traditional budgeting, while efficient from a time standpoint, has its flaws. For one, traditional budgeting makes it easy for a company to operate at the (a hush falls over the room; eyes widen; looks of disgust prevail) status quo.

Right, because we’re all aiming for status quo.

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Tags: Budget, Advice

4 Summer Tasks to Prep Your Business for a Stellar Year

Ah… summer, the time for barbecues, the beach, concerts, and books. While I’m sure that new John Grisham novel is calling your name, you know what’s screaming it? Your business’s books. That’s right, summer is a great time to evaluate how your business is performing and take care of some of those unsexy tasks that just need to get done. So, when summer hits each year, trigger these 4 to-dos.

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How Often Should I Review My Business Budget? A Mid-year Guide

The vast majority of businesses create a budget for the year and then never look at it again (until the end of the year when they’re creating the budget for the following year). Sound familiar? We thought so.

Because so few business owners actually make the time to review their budget over the course of the year, doing so may give you a huge leg up on your competitors. Imagine two lemonade stands: Lulu’s and Larry’s. Both developed a budget for the summer, but only Lulu did a midsummer review. She realized that her cost of goods sold was higher than she had budgeted. When she dug in, she realized that cost of lemons at her local grocery store had slowly increased over the past few weeks without her even noticing.

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Financial Model Vs. Budget: The Showdown

Back last year, we wrote a post on How to Build a Basic Financial Model (model template download included!) and got a lot of great feedback on it… so we took the concept on the road. Or more like across the city to a financial modeling workshop at Chicago’s hottest food and beverage incubator, The Hatchery.

While the audience consisted primarily of food and beverage consumer packaged goods startups (with a few restaurants thrown in), they asked a lot of great questions we thought would be helpful to share.

What is the difference between a financial model and a budget?

One topic that seemed to generate a lot of questions was budgeting. Several business owners admitted to having spent days, if not weeks, pulling budgets together for a specific point in time--to present at an investor meeting, to kick off a new product launch, to start a new year--but most never took the time to keep the budget updated afterward. Others had never built a budget at all.

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