Budgeting for Small Businesses

You don’t have a money problem. You have a money management problem. And if you're running a small biz... It can quietly kill your growth. Here's how most business owners lose cash: ☐ Mixing personal + business money ☐ Forgetting to track small expenses ☐ Paying everyone else, but not themselves ☐ Hoping, not planning, their cash flow ☐ Not knowing when they’re actually losing money I did most of these. Until I fixed them with simple steps. Here are 11 small but powerful finance tips that saved my sanity: Track everything → Use an app. Or even a notebook. Just track. Split your accounts → Biz money needs its own home. Always. Create a budget → Know what’s coming in. Know what’s going out. Pay yourself → You’re not a volunteer. Pay yourself like a pro. Review cash flow every week → You need to know your runway. Not guess it. Cut dead weight → Cancel tools and services that don’t earn back. Build an emergency fund → Aim for 3 months of biz expenses—minimum. Tackle high-interest debt first → Every delay costs you more. Automate your invoicing → Don’t rely on memory to get paid. Hire a pro bookkeeper → Even part-time help can save your time + peace. Review your numbers monthly → Trends matter. And numbers never lie. 📌 P.S. Most business owners don't need more money. They just need more control over it. What’s one finance habit you need to fix this month? 👇 I work with early-stage founders who feel stuck. → Not sure what’s next → Can’t get past the plateau → Ready to grow, but not sure how If your finances feel foggy, or your biz feels flat... Let’s talk. I help you build clarity and momentum.

Cost-cutting has a bad reputation. Most leaders think layoffs are the answer. But $100K+ in savings is hiding in plain sight. I’ve led dozens of cost-reduction projects and saved companies millions. Here’s what I’ve learned: You don’t need layoffs to cut costs. The proof? Companies waste 30% of their budget long before even looking at headcount. Here’s the cost-cutting framework that saves big—without layoffs: The 4Cs of Strategic Cost Reduction: 1/ Cancel: ↳ Audit unused tools, licenses, and low-ROI expenses. ↳ Cut what doesn't deliver 2/ Consolidate: ↳ Merge overlapping tools, processes, or contracts. ↳ One tool, one vendor, one contract 3/ Control: ↳ Create spending guardrails: limits, approvals, and audits. ↳ Track expenses over $500 to stop leaks early. 4/ Collaborate: ↳ Use fractional experts or outsourcing for specialized work. ↳ Pay for outcomes, not hours. 10 Proven Tactics to Cut Costs and Save Big: 1/ Audit Quarterly Subscriptions 2/ Renegotiate Vendor Contracts 3/ Reimagine Office Space 4/ Simplify Tech Stack 5/ Audit Marketing Spend 6/ Extend Payment Terms 7/ Automate Manual Tasks 8/ Use Fractional Experts 9/ Tighten Expense Policies 10/ Focus on High-Impact Areas The truth about strategic cost-cutting? You can save more by optimizing systems than By cutting your greatest asset—your people. What’s your favorite tactic—or what would you add? ♻️Share to help other leaders And follow Mariya Valeva for more

Here's how I'm doing budget planning this year. First - let me be real. I’ve struggled to build budget models that are both practical and aspirational. And I've learned from lots of "doing it wrong." They need to be grounded in reality—actual data, actual constraints—but they also have to make space for growth. Without that, it’s just a spreadsheet exercise, not a plan for the future. Over time, I’ve found a framework that works—one that’s helped both in scaling a service business and a software one. It starts with this truth: Growth is King. Growth isn’t just a goal; it’s the compass, the drive, and the path forward. It answers questions like: -> Does this decision help or hurt our growth rate? -> Are we investing in the right places to unlock future growth? Growth creates its own momentum—and its own challenges. The “S Curve” of scaling means every growth milestone presents a new set of problems to solve. Success requires starting the next curve while still climbing the current one. Every budget needs to reflect the centrality of growth. It is the goal, the guide, and the reality check. With that in mind, here’s how I am building our FY25 budget: The 3 Financial Plans 1. The Base Plan (60% confidence): This is the plan grounded in reality but pushing toward growth. 🔸How to make it: - Use the average revenue growth from the last 4 months as your driver for the next 12. Retain growth gets hard over time. This isn't a slam dunk. This is still hard, but achievable. It's based on reality - what you have done before. - Build hiring, bonuses, and investments around maintaining that growth rate. - Base budgets for sales, marketing, and engineering are modeled top-down. This is the budget everyone sees. It’s hard, but it’s achievable. It becomes the foundation. 2. The Stretch Plan (10% confidence): This is the “stars align” plan, designed to break out of incrementalism. It’s where you push beyond comfort zones and bet on the extraordinary. How to make it: 🔸Increase your base plan revenue growth by 20%. 🔸Assume perfect execution: GTM firing on all cylinders, flawless teamwork. This is where magic happens, but only if you’ve got the right conditions. Who sees it? Only the management team—don’t show this widely. This is for dreaming, not managing. 3. The Worst-Case Plan (90% confidence): What if we miss? Planning for setbacks allows you to stay steady in the face of turbulence. How to make it: 🔸Decrease the base plan revenue growth by 20%. 🔸Keep burn steady from the base plan (most important part) 🔸Focus on cash flow to understand the financial runway if growth slows. This plan isn’t about panic; it’s about clarity. It answers, "what happens if we don't hit the goal and have already made investments." This is the, "I can sleep at night" plan. Do we have the cash to sustain? It ain't perfect. But it is directional right and the team aligned. Stay Supered⚡ -Matt P.S. I'll send the budgeting template via DM. Let me know via comment.

33% of CEOs don't trust their CFOs. The 5 areas I focus on (first 90 days): 𝟭) 𝗥𝗲𝗱𝘂𝗰𝗲 𝗘𝘅𝗽𝗲𝗻𝘀𝗲𝘀 The first thing I do with a new client is lower their expenses. This provides a quick win and frees up resources. Common cost-cutting opportunities I see: • Extra licenses • Unused subscriptions • Costs that feel worth it but are not –– 𝟮) 𝗦𝗵𝗮𝗿𝗲 𝗜𝗻𝘀𝗶𝗴𝗵𝘁𝘀 𝗖𝗹𝗲𝗮𝗿𝗹𝘆 If the books are messy → I clean them up. If the books look good → I put together the core financial statements and make sure everyone understands them. I like to involve the whole team by opening the curtains wide on the company’s financials. This increases trust and accountability. –– 𝟯) 𝗢𝗽𝘁𝗶𝗺𝗶𝘇𝗲 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗣𝗿𝗼𝗰𝗲𝘀𝘀𝗲𝘀 I work with clients to streamline: A) Invoicing Many of the cash flow issues I see with clients can be traced back to slow collections. So I make sure invoices are going out in the correct amount and in an easy-to-understand format. B) Closing the books faster I understand the urge to close the books and move on. But clean books don’t mean much if you don't study them shortly after closing. That’s where I work with clients to get their books ready in about half the time. The result is ample time for reviewing performance. C) Monthly financial reviews A good financial review = meeting with the accounting team to study the P&L and Balance Sheet and investigate any budget variance Your goal is to explain each variance and put together an action plan to reverse any concerning trends. –– 𝟰) 𝗖𝗿𝗲𝗮𝘁𝗲 𝗮 𝗦𝘁𝗿𝗮𝘁𝗲𝗴𝗶𝗰 𝗙𝗶𝗻𝗮𝗻𝗰𝗶𝗮𝗹 𝗣𝗹𝗮𝗻 We set goals and KPIs, determine what’s doable, and come up with a specific roadmap. For your strategic plan to work, it needs to tie back to the financials and be broken out into manageable steps. –– 𝟱) 𝗜𝗺𝗽𝗿𝗼𝘃𝗲 𝗖𝗮𝘀𝗵 𝗙𝗹𝗼𝘄 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 I’ve yet to work with an SMB that didn’t have any room for improvement here. Collections tend to cause the lion’s share of cash flow issues. But clients often overlook the other side of the equation: when and how they pay their own bills. It’s pretty common for owners to pay bills as soon as they get them. But I don’t recommend it. It's better to wait until the day they’re due and set them up for autopay. This way you keep cash in the business longer without running the risk of dinging your credit. Took me a LOT of scrambling in my early days to have this clarity... But after helping over 75 SMBs, I feel confident these are the first steps a CFO should take with a new client. If you enjoyed reading this, let me know and follow me for more strategic finance, SMB, and business content. — Need help with your finances? Feel free to send me a DM. Always happy to help.

Before fundraising, we were bootstrapping. This "profit-first" mindset taught us how to track all costs. Controlling cash flow was in our DNA because, without it, our business could fail quickly. We even had different banking accounts for different purposes: taxes, expenses, reserve funds, and profit. When we received revenue, we allocated a % of it to specific accounts. It helped us not to overspend. So, I learned a lot from that period. And I have my 7 favorite hints that I still use: 1️⃣ Think of 2 categories of expenses: non-strategic and strategic. The first one doesn't make any money. Here you have all your operational expenses. The second category is about expenses for product improvement, revenue growth, entering new markets, etc. Keep the first category small and invest more money in the second one. 2️⃣ Monitor the revenue per employee dynamic, not just revenue growth. It helps to analyze the efficiency of growth. 3️⃣ Read P&L in the next order: Revenue ⇒ Profit ⇒ Expenses When you review expenses after seeing profit results, you analyze them differently. You ask yourself if these expenses were truly necessary. 4️⃣ Share the monthly profit and loss (P&L) statement with the team and ensure everyone knows how to read it. When revenue grows, expenses also rise. Begin by encouraging everyone in the company to prioritize profit. 5️⃣ Think twice before incurring new expenses. Increasing expenses is much easier than cutting them. I always keep in mind the strategy of holding off on funding item A until its necessity is clear. 6️⃣ Start with the profit per unit you sell. You can create a simple calculator to try out different ideas about costs and prices before making decisions. Ensure that all team members use it and understand the impact of their decisions on unit profitability. It also helps you focus on more profitable products. 7️⃣ Monitor daily or weekly cash flows and balance. Don’t forget about budgets and budget vs. actual analysis. 🟩 In the end, I want to share one inspiring story from our conversation with Bolt’s CEO Markus Villig on how they won the market with a cost-efficient strategy: “Our philosophy from day one has been that to win in this industry, you need to be a cost leader. So what we did from the very first days of the company was that we would be the most efficient transport operator in the world so that we would keep our costs really low. And we always monitor the costs as a percentage of our GMV. So what it means is that if let’s say your cost to run the business is 5% of GMV, that means that if you change your drivers, let’s say 10%, you will have a very healthy 5% margin. So what we saw many of our competitors do was that they had an extremely high-cost base, so maybe it was 15 or even 20% of GMV. And therefore, they had to take a very high commission from every trip as well. And that made them just under competitive against us” And May The Profit Be With You 💚

Here's a quick tip: One of the biggest struggles small business owners have is this: 👉 Managing cash flow In the 6 weeks I've started my company, I've had 4 business owners ask for help managing cash. Luckily, in my career, I've build many cash management and planning models. So here's the tip: QuickBooks has a tool that's a game changer - and most business owners using Quickbooks don't even know it's there. The Cash Flow and Planner Tools in QuickBooks Online can help you stay ahead of cash issues before they become a problem. Here's how: The Cash Flow Tab This pulls real-time data from your connected bank and credit card accounts and gives you a clear view of: 👉 What’s come in and gone out 👉 Your current bank balances 👉 What’s expected based on your bills and invoices Boom! The Planner Tab This is where the magic happens. When you go the Planner Tab, it opens the Cash Flow Planner tool. This lets you forecast your future cash position using real-time and historical data — plus, you can play out what-if scenarios (like adding an expense or big invoice) to see how it impacts your future cash flow. If you're not paying an bookkeeper or accountant to help manage your cash, these tools can be HUGE for you! Good decisions require good data. These tools gives you exactly that. No more guessing if you can afford that next hire or investment. If you’re not using these tools, or need help setting them up, let’s chat.

I've seen companies with millions in revenue struggle to make payroll because they're leaking cash from dozens of tiny holes. That’s why I developed something called "The $10K Profit Leak Audit." Here's the playbook: Step 1: Pull Your Top 10 Expenses Review your expenses from the last three months and identify your 10 largest recurring costs (excluding one-time purchases). Send this email to your leadership team to “encourage” them to help with the process... SUBJECT: This stops today Hey [FIRST NAME], I was reviewing our monthly recurring expenses and they've gotten a little out of control. We're paying for tools and services that I know we aren’t using and in some cases probably don’t even remember buying. We're not going to do that any more. Here's what I need you to do. 1. Export credit card charges by month for the last [3 or 6] months. 2. Filter recurring payments and sort from most to least expensive. 3. Let's meet [DATE] at [TIME] to create a keep, kill, question list. 4. At the end of the meeting we’ll cancel the entire kill list and add up how much cash we just freed up. It's going to feel so good after we get this done. Let me know if you have any questions. [YOUR NAME] Step 2: Ask the “3-Why” Questions For each expense, ask the following three “Whys” 1️⃣ Why do we pay for THIS? (You’re likely paying for legacy tools no one even uses.) 2️⃣ Why do we pay THIS SPECIFIC VENDOR? (You’re likely paying people who added value in the past but no longer add value today.) 3️⃣ Why do we pay THIS MUCH? (You’re likely paying more than you need to pay, because most vendors will lower their rates if you ask.) Step 3: Apply the 30% Test Ask, “Could we cut this expense by 30% without seriously impacting operations?” If yes, it's a leak. Cut it. Step 4: Identify 3-5 Key Metrics For each identified leak, establish a specific dollar amount reduction target with a deadline. The average business I work with finds at least $10,000 in immediately recoverable monthly expenses through this process (hence the name). Virtually every business has extra profit hiding in plain sight… …you just have to be willing to look (and ruthless with what you find it). ⚡ Action Step: Run a “Profit Leak Audit” this week, and then set a reminder to repeat the process in 90 days. Goal: Find 3 - 5% of extra profit margin. P.S. You just read one of the most popular posts from The Accidental MBA, my free newsletter for bootstrapped business owners. My goal with each issue is to help you generate at least $10,000 in new sales, capture at least $10,000 in immediate profit, or save at least 10 hours a week through better systems. You can subscribe now by going to: 👉 https://lnkd.in/gy3h5sG7

I joke with my friends that 90% of the work we were paid to do as Bain consultants was fancy-looking activity-based costing. Getting costing right matters - a lot. It's the only way you can understand profitability. After all, to understand how profitable (or not) customers are, it makes sense to know what it costs to serve each of them. Here's a reliable way for small business owners running people-intensive businesses to do it themselves: 👇 1. Set up a timekeeping system for everyone. 2. Break the work into categories. Some services are more expensive to deliver than others, based on skill, effort and time. 3. Assign direct labor costs to each category. Wages plus benefits, bonus and commissions attributable directly to the people who deliver the service. 4. Allocated overhead, consistently and fairly, in a way that correlates with the consumption of the service. For example, 14% of time spent on services recorded (in step one) allocated to overheads. 5. Look at the service requests from the various customers you've served recently. It might pay to look back 90 days or even more to smooth out random variations. If you're not able to do this perfectly, do your best. If service requests aren't consistent from week to week, there's a limit to how accurate your analysis will be. 6. Calculate the costs per customer. You almost certainly won't have done everything perfectly so far, and new customers might require slightly different expenses to serve, but it's a start. Recalculate these costs on an ongoing basis, either weekly or at least quarterly. You don't need to do all the work, just enough to know that your costing is in the right ballpark. 7. Use software tools like Google Sheets or project management software to keep track of this. This sort of thing has been built before, and it's worth figuring out which tool works for you. Asana and others can do a lot of this heavy lifting automatically. 8. Review. Inspect. Don't settle for, "we're busy now, we'll get to it later." 9. Share your analysis with the teams that are doing the service, and be open to their insights. Just because your finance team says something doesn't mean it's correct. Just because your sales team doesn't want to hear it doesn't mean they're right either. They are on the front lines and have plenty to teach you. 10. Make sure your teams are open with relevant customers about what you're learning. In some cases, it might make sense to charge more. In some cases, it might make sense to offer more. Knowing is better than not knowing.

As a business owner, making money is often the easy part. But managing it? That’s where people start falling off. Here’s how the business owners that actually make it manage their dollars: Cash flow problems, unexpected expenses, and poor investments can quickly take a once profitable business and run it into the ground. So whether you’re at the freelancer stage or growing into a full-blown agency, the basic principles of money management that I drop in this post will always be relevant. When you're first starting, keep a close watch on your expenses. Subscriptions, A bit of marketing spend, Maybe some insurance might seem small, but they add up. Know what you’re spending and why. Make it a habit to set aside money for taxes from the get-go, and have a safety net in place for those inevitable slow periods. As you start landing more clients, your costs will increase. This is when you’ll start considering Outsourcing tasks, Investing in better software, and Spending more on marketing to bring in more business. It’s easy to get excited and overspend, but stick to a budget and be smart about where your money goes. Diversify your income streams and avoid depending too much on just one or two big clients. When you move to the next level and start hiring employees or renting office space, your financial responsibilities will multiply. Now you’re looking at Payroll, rent, Employee benefits, and Legal compliance. You MUST have effective cash flow management at this stage or you’ll sink quickly. Be sure to: 1) Forecast Regularly: Keep a close eye on your cash flow projections. Update them monthly, if not weekly, to get a clear picture of your income and expenses. This helps you anticipate shortfalls and plan accordingly, whether it’s adjusting your spending or ramping up your sales efforts. 2) Implement Invoicing Best Practices: Don’t let your cash flow get tied up in unpaid invoices. Set clear payment terms, send invoices promptly, and follow up regularly. Consider offering small discounts for early payments to incentivize your clients to pay sooner rather than later. 3) Build a Cash Reserve: Aim to have at least three to six months’ worth of operating expenses saved in a separate account. This reserve acts as a safety net, giving you breathing room to cover payroll and other critical expenses during slower months or in the face of unexpected challenges. 4) Monitor Expenses Closely: As your business grows, so will your expenses. Keep a close watch on where your money is going and look for areas to cut costs without compromising quality. Regularly review your subscriptions, renegotiate contracts, and eliminate unnecessary spending to keep your cash flow healthy. Think beyond just making ends meet. Build a strong foundation that allows your business to grow without hitting financial roadblocks. Making money is just the start. Real success lies in how well you manage it.

Growing businesses often make this costly mistake: As your company scales beyond $10M in revenue, the financial complexity doesn't just increase - it multiplies. What worked at $5M won't cut it at $10M. I've spent two decades working in finance and here's what's crystal clear: Finance isn't just about tracking numbers - it's about making strategic decisions that impact every aspect of your business. Especially these days. You need more than just basic bookkeeping. You need sophisticated financial planning that can: - forecast cash flow across multiple revenue streams - analyze customer acquisition costs at scale - track profitability by product line - model different growth scenarios Recently, I worked with a $15M company that uncovered $800K in untapped profit potential they weren't seeing. Stuff that would have easily been unseen if they did not have someone properly look at their finances. Here's what robust FP&A (financial planning & analysis) delivers as you grow: - strategic resource allocation - early warning systems for potential issues - data-driven decision making - clear visibility into performance metrics The bigger your business gets, the more critical FP&A becomes. It's not just about tracking where your money went - it's about understanding where it should go next. #financialpuzzlessolved #finance #growth