Budgets 2017 — Get Back To Work, Y’all! Shop Talk

Budgets. Nothing says the holidays are coming like budgets. Budgets make the world go around.

Big Red Car here on a lovely, sunny Monday in the ATX. Ahhh, on Earth as it is in Texas!

So, the election has everybody off their schedule with their lamentations and celebrating.

But, what are you supposed to be doing, y’all?

Of course, you know, you’re supposed to be finalizing your 2017 budgets, Ms. Startup CEO.

Budgets

Budgets are dynamic documents (meaning you can revise them throughout the year as many times as you want) which must be created to give the startup and fledgling company a plan as to how the money is going to come in and how the money is going to flow out. In the beginning of a startup, it is essential to know how much runway the company has in front of it. Runway being the number of months of survival at the then current monthly burn rate.

Any budget plays trump to no budget and budgets are the kind of thing you get better at as the company begins to grow. It is a classic crawl, walk, run process and you have to start crawling now.

Schedule

Here’s how it should probably work out for you. Any version of this is fine.

 1. In October put out the word — begin work on the next calendar year budget by studying performance to date. Make sure your people get it and, maybe, a quick cup of coffee to discuss the year to date v the 2016 budget. Appoint a single point of contact to be in charge of the process. Might be you, beloved CEO.

 2. In early November, cobble together the first pass at a budget — revenue and expenses. Circulate it, making certain everybody knows it is the first pass, a draft.

 3. In mid-November, incorporate feedback and modify the budget to assimilate any changes. Make sure those who suggested changes see their fingerprints on the murder weapon. This gets you buy-in.

 4. At Thanksgiving, send the budget along to the Board to review. Solicit feedback. You may want to have had a chat with your Chairman about the budget. Your call on that one.

 5. In early December, incorporate all Board input and put forward a final, draft budget. Schedule a Board meeting (can be a majority vote in lieu of a meeting if the Board is generally in agreement).

 6. In mid-December, print the Board-approved budget and distribute it internally. Put a cover memo on it and note which internal inputs are contained therein — buy-in.

 7. By Christmas, have an all-hands meeting to present the budget (the hands have already seen it). Get buy-in and circulate finished copies and post it digitally amongst the company’s lore. Don’t let anyone be able to say, “Hmmm, I don’t remember that.”

 8. By the end of December, have the budget loaded into your accounting system.

 9. On 3 January 2017 (first business day after New Years when you do not have a headache), begin to execute — in accordance with the plan, in control, and going from crawl to walk, looking forward to running.

Pretty easy stuff when you have a plan, no?

Dollar weighted org charts

Pro tip: Make dollar weighted org charts to conform with your planned growth. Make them for 90-day periods and show each existing and new position, the cost of each position, calculate a few ratios.

Now, get back to work and stop being a whiny, liberal or a bigoted racist. The election is over. Get back to work.

But, hey, what do I really know anyway? I’m just a Big Red Car. [I put a new paint job in the budget for The Boss. Here’s hoping. I need one.]cropped-LTFD-illust_300.png

  • Lawrence Brass

    Budget time and about time the Boss go back to the bar to meet his friends. Tell him that we miss him and about a saying in spanish.. “quién se va sin que lo echen, vuelve sin que lo llamen”.

  • Steps 4,5,6 could be sped up if a short version of them is applied before Step 3.

    As in…

    I need a realistic $$ amount for “developer tools.” How best to calculate this, other than asking dev team to create their own budget (modified Step 3). And so on for each team or JTBD.

    Then Step 4, less shell shock. And I know team != board, but sometimes you have no board. Or, you control the board, and thus buy-in from minority partners is not mission critical.

    • JLM

      .
      Your response is exactly how a CEO is supposed to tailor the guidance to his own use. Brilliantly played.

      Remember — practice how you intend to play. Be the team and company today you want to be in five years. It won’t be such a shock then.

      BRC
      http://www.themusingsofthebigredcar.com

  • JLM

    .
    Budgets? Ahh, I love the smell of budgets around the holidays. You?

    Learn about them here.

    http://themusingsofthebigredcar.com/budgets-2017-get-back-work/

    BRC
    http://www.themusingsofthebigredcar.com