Edition #32: When No One Respects The Budget

Introduction

Hi Friend,

Have you ever spent hours creating a detailed budget, only to see it dismissed as “just a formality”?

Leadership overspends, teams ignore it, and your carefully planned numbers are forgotten in the chaos of day-to-day operations. Frustrating, isn’t it?

But here’s the truth: Your work matters. You’re not just creating numbers—you’re building a roadmap for growth, stability, and purpose.

Today, we’ll explore why budgets often fail in unstructured SMEs and, more importantly, how you can make budgeting an indispensable tool for success.

The Problem: Budgets Aren’t Respected

In many SMEs, budgets are seen as restrictive rather than empowering:

- Leadership spends impulsively, ignoring the financial roadmap.

- Teams prioritize immediate needs over long-term goals.

- Financial crises leave you scrambling to manage cash flow.

Without buy-in, your budget becomes irrelevant, and you’re stuck firefighting instead of leading.

Here’s the hard truth: A budget that isn’t respected isn’t positioned as essential.

A Story: Tunde’s Transformation

Let me tell you about Tunde, an FBP at a family-run SME. Every quarter, he built budgets designed to guide the company, but they were ignored. Leadership’s impulsive decisions wrecked cash flow, and Tunde felt invisible.

One day, after a payroll scare, Tunde decided to take action. He called a meeting with leadership and said:

"The budget isn’t a restriction—it’s the only thing keeping us from collapsing."

Tunde introduced monthly “Budget Health” reviews and tied the budget to strategic goals like profitability and growth. Leadership began to rely on the budget, not just approve it.

Today, Tunde isn’t just creating budgets—he’s shaping the company’s strategy.

You can do the same.

Ajibola’s Tips: How to Make Budgets Work

1. Reposition the Budget as a Strategic Compass

Budgets fail when they’re seen as limiting. Instead, position the budget as a tool that drives the company’s vision.

Action Tip: When presenting your budget, link each allocation to a specific business goal. For example:

- Marketing budget → Attracting 1,000 new customers.

- Training budget → Upskilling the sales team for higher conversion rates.

2. Make the Budget Dynamic

A static budget gathers dust. A dynamic budget stays alive and relevant.

Action Tip: Schedule monthly “Budget Health” meetings to:

- Review variances and adjust allocations.

- Celebrate successes where the budget drove results.

- Reaffirm the budget’s role in achieving strategic goals.

3. Highlight the Cost of Ignoring the Budget

Numbers tell stories. Use them to show the impact of ignoring the budget—missed opportunities, wasted resources, and instability.

Action Tip: Create a simple “Budget Impact Report” comparing outcomes of:

- Following the budget (e.g., improved cash flow, reduced costs).

- Ignoring the budget (e.g., overspending, delayed payroll).

Real examples resonate with leadership.

4. Collaborate, Don’t Dictate

Budgets built in isolation fail. Engage leadership and teams in the process to foster ownership and accountability.

Action Tip: Hold pre-budget workshops where department heads provide input. For example:

- Ask Marketing to justify their spending.

- Collaborate with Operations to prioritize resources.

When everyone contributes, the budget becomes a shared plan, not a top-down mandate.

5. Hold Leadership Accountable

A budget starts with leadership. If they don’t respect it, no one will.

Action Tip: After leadership meetings, circulate a summary of budget-related commitments. Follow up regularly to ensure alignment and track progress.

“A budget isn’t just a financial tool—it’s a mirror of your company’s priorities, discipline, and vision. Treat it with respect, and it will reflect success."

Your Next Step

Tired of watching your budgets get ignored? Let’s fix that.

Our mentorship program is designed to help FBPs like you turn budgeting into a respected, strategic tool. Together, we’ll position your work as indispensable to your company’s growth.

Final Thought

Budgets aren’t just spreadsheets—they’re the foundation of every decision, every goal, every success. When no one takes them seriously, the company suffers. But when you, as an FBP, champion the budget, you turn it into the company’s compass.

Your work isn’t just valuable—it’s essential. Now is the time to lead.

Cheers,

Ajibola