Written By: Charles-Hubert Déry, CEO and Co-founder of BUDGETO
I have good news for entrepreneurs: budgeting is easy! When you think about it, it’s simply translating your business project into numbers. It’s the only way for you to validate that your business project makes sense financially, and then when you actually start your business, it’s the only way to know if you are in fact, achieving your goals.
Still, there is this preconceived idea that budgeting is complicated. Most entrepreneurs are not accountants or finance specialists, so how would they know how to build a budget? The fact is that many entrepreneurs are afraid of numbers. Well maybe not the numbers themselves, but all those calculations that come along with building the budget. All those rules that you don’t know about, but that somehow, you need to manage in a budget. Amortization of your capital assets, debts schedules, recognition of your revenues, and so on. And don’t even get me started with building a balance sheet, an income statement or a cash flow projection!
So what’s the problem between budgets and entrepreneurs? The answer is quite simple. In a world where everything is going online (bookkeeping, banking, payment solutions, etc.) how come entrepreneurs are still stuck with spreadsheets? Spreadsheets are not easy to use, they’re not standardized and they can be quite dangerous. Close to 90% of spreadsheet documents contain errors. Yet we ask entrepreneurs to use them to build budgets, and then we ask investors to analyze those spreadsheets to make investment decisions. That’s just crazy.
Here’s the good news: it’s 2016! Yes, spreadsheets are still very popular, but if you look around, you will find tools allowing entrepreneurs to actually build and understand budgets themselves. Tools that will manage income tax, sales tax, employer contribution rates, capital assets categories and all the calculations needed in a budget. Tools that will help you build five year pro-forma budgets and answer all those requirements from your different stakeholders. Tools that will allow you to work on different scenarios and share your budgets online with partners of your choice. Those tools are designed to meet all the expectations of investors, making it possible to fill the gap between entrepreneurs and investors by allowing them to speak the same language, therefore accelerating access to financing and launching new businesses.
Budgeting is not your enemy. It’s your best friend. And you know it, but you’re daunted by it. In my many years as a consultant, I have worked with over 100 start-ups. My words of wisdom are quite simple: “You will not succeed because you have a budget, but you will undoubtedly fail if you don’t have one.”
About Charles-Hubert Déry
Charles-Hubert is the CEO and Co-founder of BUDGETO, an online budgeting tool allowing entrepreneurs to easily build and share budgets. Before being CEO of Budgeto, Charles-Hubert worked as a consultant in over 100 start-ups, helping them with bookkeeping, budgeting and financing.