Entrepreneurs: create a budget to help inform strategy!

When you want to execute an idea and are deciding upon a strategy there is one step you should do: create a budget to help inform strategy. Even if it is only tentative, a budget will not only help you gauge how much money is needed, but it will also how much money you are bringing in to the project. Doing a budget for a couple of different scenarios really helps you with a fiscal overview that will help you decide on what type of strategy is best for executing your idea.

Go big or go small
Go big or go small

Going big or starting small

I am currently working on a project that involves payments to artists and small companies. It is one goal of the project to help people get paid more efficiently without having to resort to payday loans. Sites like CashLoans help a lot of entrepreneurs make it until the next pay check.

Our project is ready for execution, the only thing we need to decide is the strategy. We can either go big or small. In other words, do we want to get finance for the entire project with a big launch and marketing up front. Or do we want to keep a tight rein on the finances and start small. Do we want to enter the market with a splash, or grow the project organically over time.

Create a budget to help inform strategy

In order to help us make a decision about what strategy to choose I decided to run the numbers. The first step is to make estimates of the costs of going big.

budget
Use budgets to inform strategy

The next step is to create a budget with as small scale as possible. This shows how much initial capital is needed to execute both a big and a small strategy. Finally, and perhaps most important, create a couple of scenarios for turnover. Both small and big. This helps clearly visualize potential turnover.

With these numbers in hand, even if it is mainly guess work, it is much easier to understand your project. You immediately see pressure points such as salaries and customer volume. It also gives you an understanding if starting small or big is even viable.

With this information readily available it is easier for you to decide to go small and what that entails. If you decide to go big you have already taken the fist steps in creating the information needed for potential investors to get involved in the project.

Budgeting is a great tool for deciding how to decide what strategy to employ in executing your ideas. Best of luck!