?? Series 4/6: Budgeting — The Art of Financial Planning

Budgeting for a small agency business is simple compared to other industries. Often, an agency grows without investments or loans, and without major issues related to cash flow or liquidity.

To put it simply, the money clients pay is used to cover employee salaries and tools, month by month.

But structure is still crucial!

November is the time when everyone starts drafting budgets for the next year. I love this process and currently, I’m drafting three budgets for 2025:

• A positive budget as a goal,
• A realistic budget for planning expenses,
• And a pessimistic budget for emergencies.

Every Excel sheet with a budget should include two columns for each month: planned figures vs. actual numbers. Regularly comparing these figures helps guide decisions month by month.

However, the key advice lies elsewhere: true understanding of your business comes only when you play with the numbers, look at them from different angles, and ask new questions. For example:

Revenue

?? How much does each client contribute annually, quarterly, and monthly?

?? What percentage of revenue does each client represent?

??? What portion of the business comes from one-time payments vs. recurring payments?

Expenses:

?? What percentage of expenses goes to salaries, tools, or different departments?

Sales

?? CVA (Customer Value Acquisition): What’s the cost of acquiring a client?

And so many other questions…

Budgeting isn’t just about numbers; it’s about asking the right questions to unlock deeper insights into your business.

#Budgeting #BusinessManagement #Sales #Revenue #CashFlow

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