Why budgets never work? digitalbloggers.com /business/why-budgets-never-work Aug 18, 2017 9 views Written by Pedro Campos
Author Pedro Campos
Articles written: 17 Joined: 22 July 2017 Niche: Health and Fitness Internet and Businesses Online Self Improvement
It may be a surprise for most of the people, but the truth is that budgets never work, actually, they suck. I will explain the reasons why you shouldn't have one and how to solve the question. As written in the dictionary, a budget is "an estimate, often itemized, of expected income and expense for a given period in the future." Ok folks, the dictionary has is the thing right, as it says that a budget is an expected income and expense. That`s where the problem is because you can not predict anything in a budget and things can happen to you or to your business that you simply don`t expect. You can't predict every single item that you put in a budget and you are limited by your expenses, which makes you feel contracted.
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So what`s the solution to this problem? It`s simply to not have a budget. Instead, you need to shift your focus to producing more income rather than be stuck in the strictness of a budget, by putting the majority of your attention on getting revenue and not worrying so much about the expenses, and by this I don`t mean that you are not gonna care about the expenses... you are, but spending most of your time producing income, rather than using it in creating expenses. I have the example of my parents, who had a budget for 40 years, and that budget has been failing year after year since I can remember because the problem hasn't the control of revenue and expenses, but in the lack of income. In the case of governments, is obvious that a budget is appropriate since there is no product to sell, so it makes sense to use it, contrariwise to a business that is selling a product and like I mentioned, there are a lot of things that can go wrong. If you are in a situation where you are not able to produce income, then a budget is recommended, otherwise is just a waste of time and energy. Let`s see an example: you own a business and your team comes up with a very good idea to throw it into the market, and that idea requires you to spend money, what are you gonna tell to your team? "No, we can`t use the idea because we have a budget to obey... we are already over budget, we can`t do it." If you do that, you are killing your business, man. I don`t understand why some many business owners refuse to break their budgets with an idea that can make them money, but they break the budget if an emergency knocks in their door, like a fire, for example. Isn`t making more income an emergency? This is why budgets never work, people. Make sure to follow me on social media and if you have any question, you can message me at any time, meanwhile, don`t miss the opportunity to click the image below to know more about my work and my mentors.
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