How to Budget Your Business

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You know how businesses go out of business?

It's like this:

  1. Spend on junk that barely affects Customer Stewie's life.
  2. Spend some more on junk.
  3. Spend a tiny bit on customer value stuff.
  4. Spend even more on junk.
  5. Go out of business.

How do you avoid sucking?

Try this:

  1. List expenses.
  2. Then, rank your expenses by this measure: How much value does it provide your customer?

Rock your business accordingly.

  • The Suck Business: Let's buy mighty expensive chairs because we need to be comfortable!
  • The Good Business: Let's buy that industry report to help our clients further.

Ta-$!^@-da.

That is, expensive chairs might make you more comfortable; but if the:

  • customer value provided by comfortableness < customer value provided by report

...that means: spend more on the entity that drives more customer value (the report).

Quickest Way to Identify and Eliminate Waste

Two columns:

  1. Expenses ordered their dollar amounts.
  2. Expenses ordered by their customer value.

That will help you identify:

  • where you're wasting money
  • where you're underusing your resources

For instance, expensively-customer-value-sucking items:

  • high rent
  • expensive lamps, chairs, desks, tables, yaddas
  • brand new $2500 computers for every new employee
  • pricey polos for in-house employees
  • ridiculously-expensive printers for a print-unrelated company
  • $^@%^@%^@ $$$ paintings

Possible cheeeepy-customer-value-goodness?

  • email tips
  • intro phone calls
  • industry reports
  • ongoing training stuff
  • newsletters

The Quick Steps

  1. Understand precisely what can deliver value to your customer's lives.
  2. Rock accordingly.

Custom-value || Expenses.

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Posted on February 10

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