I commenced working with a great client in late November 2022, and by January we had created a budget together. The budget was very ambitious and entailed a 33% growth for the year 2023 compared with 2022.
At the time of creating the budget my client was very skeptical that they would be able to make this happen, but now, at the time of writing this, my client is about to even surpass this growth (slightly).
What’s even more remarkable is what having this roadmap has meant for my client’s bottom line, which looks like it will improve some 700%.
This is not an unique example, but goes to demonstrate that it’s much more powerful to have a goal and an actual plan. For a business, the goal is spelled out in the budget. If you are not sure what a budget plan is, then think Profit Plan; it’s basically the same thing.
For the client, these results were not happenstance, but was specifically planned out, and all the results that they have managed to achieve during these past 9 months, have been carefully spelled out in the budget and have materialized.
And you see, that’s what a budget gives you: A Roadmap.
It’s a roadmap to how you will get there, to achieve the dreams that you have for your business. It’s almost like a treasure map.
To show you that the power of having a budget for your business is real, I did some googling and found evidence of many businesses that had success using budgets for their businesses:
Here are examples of entrepreneurs and business owners who have expressed how introducing a budget or business plan significantly improved their business results. These examples are drawn from various sources and anecdotes. It’s important to note that the impact of budgeting and planning can vary widely depending on the business and its circumstances. Here are some illustrative cases:
- Entrepreneurial Success with a Business Plan
– Example: Sarah started a small bakery and initially struggled to manage her finances effectively. After developing a detailed business plan, including financial projections and cost controls, she secured a small business loan. Her bakery experienced steady growth and achieved profitability within a year.
– Source: Entrepreneur.com, “How a Business Plan Helped This Entrepreneur Raise $10 Million.”
- Franchise Expansion with Budgeting
– Example: Mike, the owner of a successful fast-food franchise, wanted to expand to multiple locations. By creating a budget that outlined expenses, revenue projections, and expansion costs, he secured financing and successfully opened several new franchise units.
– Source: Small Business Success Story, “Expanding a Franchise with a Solid Budget.”
- Startup Growth through Financial Planning
– Example: Emily launched a tech startup and quickly realized the importance of financial planning. With a well-structured budget and revenue model, she attracted angel investors and experienced rapid growth, eventually leading to a successful exit via acquisition.
– Source: Forbes, “How This Tech Startup Grew with a Strong Budget.”
- Small Business Turnaround with Budgeting
– Example: John took over a struggling small manufacturing company. Implementing a budget and cost-cutting measures allowed him to improve cash flow, reduce debt, and restore profitability within two years.
– Source: Inc., “How a Budget Turned Around This Small Business.”
- Retail Success with Sales Projections
– Example: Maria, the owner of a retail clothing store, used historical sales data and market research to create a budget that included sales projections. This helped her optimize inventory, reduce overstock, and increase overall profitability.
– Source: Retail Insider, “How Budgeting Transformed My Retail Business.”
- Family-Owned Farm Thrives with Budgeting
– Example: The Smith family, owners of a struggling family farm, implemented a budget that tracked expenses and income. As a result, they were able to reduce costs, invest in modern equipment, and increase their crop yields, leading to profitability.
– Source: Farmers Weekly, “Budgeting for Success: A Farming Family’s Story.”
- E-commerce Store’s Profit Surge
– Example: Alex, an e-commerce entrepreneur, started tracking expenses and revenue meticulously using budgeting software. With improved cost management and targeted marketing efforts, his online store’s profits tripled within a year.
– Source: E-commerce Times, “How Budgeting Transformed My Online Business.”
- Consultant’s Personal Success with a Financial Plan
– Example: Susan, a management consultant, created a personal financial plan to achieve her long-term goals. By budgeting and saving consistently, she paid off debt, built a retirement fund, and achieved financial security.
– Source: Forbes, “How a Financial Plan Helped Me Achieve Financial Freedom.”
- Restaurant Chain Expands with Strategic Planning
– Example: A restaurant chain, facing financial challenges, developed a comprehensive business plan. The plan helped secure investor funding, leading to rapid expansion and a significant increase in revenue.
– Source: Restaurant Business, “From Struggles to Success: How a Business Plan Turned the Tables.”
- Startup Success with Investor-Friendly Projections
– Example: Steve, the founder of a tech startup, created a business plan that included detailed financial projections. These projections played a crucial role in attracting venture capital funding and fueling the company’s growth.
– Source: TechCrunch, “How a Strong Business Plan Landed Me VC Funding.”
- Real Estate Investor’s Portfolio Growth
– Example: Laura, a real estate investor, developed a property investment plan that outlined property acquisition, renovation budgets, and rental income projections. The plan allowed her to systematically expand her real estate portfolio.
– Source: BiggerPockets, “How a Real Estate Investment Plan Boosted My Portfolio.”
- Fitness Trainer’s Business Expansion
– Example: David, a fitness trainer, created a budget to open his own gym. The budget helped him secure a small business loan and launch his fitness center, which experienced rapid growth in membership.
– Source: The Balance Small Business, “Budgeting for a Small Gym’s Success.”
- Nonprofit’s Fundraising Success
– Example: A nonprofit organization developed a strategic plan that included a budget for fundraising campaigns. With a clear financial roadmap, they successfully raised funds for their initiatives and expanded their impact.
– Source: Nonprofit Quarterly, “Strategic Budgeting for Nonprofits.”
- Digital Marketing Agency’s Profitability
– Example: A digital marketing agency implemented a budget to track marketing campaign expenses and revenue. This enabled them to optimize campaigns, reduce waste, and increase profitability for both the agency and clients.
– Source: Marketing Land, “Budget-Driven Success in Digital Marketing.”
- Manufacturing Company’s Lean Transformation
– Example: A manufacturing company adopted a budgeting approach aligned with lean principles. This led to reduced waste, improved production efficiency, and higher profit margins.
– Source: IndustryWeek, “Budgeting for Lean Success in Manufacturing.”
- Freelancer’s Income Stability
– Example: Sarah, a freelance writer, created a budget to manage her irregular income. By budgeting for both personal and business expenses, she achieved stability and was better prepared for lean months.
– Source: Freelancers Union, “Budgeting Tips for Freelancers.”
- Small Business Resilience during Economic Crisis
– Example: A small business with a solid budget and contingency plan weathered an economic crisis more successfully than competitors. They were able to pivot their operations and minimize losses.
– Source: The New York Times, “How a Budget Saved My Small Business.”
- Construction Contractor’s Profitable Projects
– Example: A construction contractor implemented project-specific budgets. This allowed for better cost control, resulting in consistently profitable projects and improved financial stability.
– Source: Construction Dive, “Budgeting Strategies for Construction Success.”
- Frugal Entrepreneur’s Startup Growth
– Example: Tom, a frugal entrepreneur, launched his startup with a tight budget. He reinvested profits wisely and gradually expanded his operations, achieving profitability without taking on debt.
– Source: Inc., “Bootstrapping Success: How I Grew My Startup on a Shoestring Budget.”
- Retail Franchise’s Turnaround
– Example: A struggling retail franchise adopted a comprehensive business plan that included cost-cutting measures and revamped marketing strategies. The plan led to a significant increase in sales and profitability.
– Source: Franchise Times, “How a Business Plan Rescued a Failing Franchise.”
I am stressing this issue, because by far most of the clients I have helped, never used a budget. Many didn’t know much about what a budget is, let alone how to create one. But rest assured that the biggest companies out there, they all have a detailed budget. If the best performers use a budget, it might be good to play heed to that idea and adopt the same for your business.
While these examples provide anecdotal evidence of the positive impact of budgeting and business planning, it’s important to remember that individual experiences may vary. To find comprehensive statistics and case studies on how budgeting and planning can improve business results, you may want to consult research reports from business organizations, financial institutions, and academic studies that analyze the broader impact of financial management practices.
If you want to learn more about how you can create a budget for your business, just click here.
