Naked Look at the Budgeting Mistake I’m Embarrassed To Share

There are some lessons you learn that you can’t wait to share with anyone that will listen.

Then there are lessons that open up your possibilities and are slightly, well embarrassing.

Embarrassing for yourself mostly because it was right there and you didn’t see it – even if it is part of your education and knowledge background.

Sometimes those lessons hurt. This is one of those lessons.

Problem Identified: My Plan didn’t support both me AND a larger team.

When creating a budget for start-up or a plan for growth, it is important to have a clear understanding of the role of your team members. A great way to do that is by creating an organizational chart. And this is where the problem occurred.

When I was planning for growth with my business coaches, Tina Forsyth and Bobbie Robertson, one of the tasks was to create an organizational chart and job descriptions. I will admit it took me a couple tries on getting a chart that felt right. Between having one that wouldn’t kill the business with overhead, to one that supported the business where, me myself and I finally didn’t “do” it all. Or one that wasn’t clouded by my ego (see: learning stage).

This is what I ended up with:

 

 

What you will see is that there is a CEO – and then there are team members, a super important part of any business when you are looking to leverage your time.

Here is a little Business 101: once you have the org chart go ahead and draft job descriptions for each role identified. If you are doing a business plan, looking at funding options, or getting ready to hire, having both an org chart and job descriptions are essential. Plus, job descriptions help you clearly identify the roles instead of adjusting the roles to match any existing team members – another lesson that had been looming on my horizon.

I always had a plan of what the business structure would look like, I just didn’t have a visual. No over-exaggeration, there was nothing nowhere. To be truly honest, all I had was an idea and a feeling. No org chart, no business plan, and more importantly it was not in my budget and it never showed in my pricing structure.

Just the prior year in my coaching program I did create a budget that included the core accounting team (three team members) and included it in a revised pricing plan. What was missing, was once that accounting team was in place, is that there wasn’t any plan for the business owner, the CEO, to get a paycheck.

Learning Stage: How This Showed Up

(HINT – this was where I wasn’t paying attention, and I fully admit I’m cute just not overly bright all the time, just most of the time).

Every time I grew the team it resulted in me not getting a paycheck. Which then would create the energetic pull of reducing the team (as in, something would go wrong – miscommunication, bad hire, bad training) and taking a few steps back just so I could get paid.

During this time I called it self-sabotaging the original plan in my head, according to my ego it was the perfect plan. Damn ego. There was a lot of negative self talk about how I just didn’t have what was needed to take the business to the new level. Or the pain my cash flow was feeling every time I took a step forward. Or that nagging “you’ve already tried that, and it didn’t work” conversation I can only have with my ego when I would go to hire a new team member.

The question is, how did I not realize this? When I stepped into growth, how could I have not double checked my budget to make sure there was funds enough to pay myself, the new overhead, AND the team? Seems like a super rookie mistake for someone who has 25+ years in accounting experience. It’s okay, you can totally agree with that statement. I did and that was the ultimate embarrassing part.

Sometimes lessons we learn hurt our ego and our pride. I also believe those lessons, once learned, put us firmly on our path of doing our purpose. Here are my most valuable take-aways during this learning stage:

  • Create a visual for your business – business plan, budget, organizational chart, job descriptions. All of these can be changed as your business grows, changes, and even pivots.
  • This visual representation gives you a solid way to dream. The more concrete you are with your dream, the more likely you can create it. But don’t hold too tight to the perfect dream. Those don’t happen, and if you are tied to that perfection you could miss an incredible possibility.
  • To leverage your time you will be adding team members. Make sure to include that additional cost in your pricing. Add in all your costs – direct costs, team costs, operating overhead, CEO management pay/benefits, and finally add in profit. This gets you your ideal price point. Otherwise you are guessing and may not have enough to pay yourself.

The final caveat: get help and support when you keep hitting your head against that very thick and hard wall. I would not have learned this lesson if I didn’t have a business coach to push me through the uncomfortable parts or my accountability group for support and brainstorming.

Morale of the Story

There is a dream to grow your business and leverage your time – but there is a difference between you the technician working in the business and you the business owner/CEO responsible for working on the business. Make sure your budget and pricing structure includes both. If you don’t, when you grow, one of you will not get paid.

Leave a Reply

12 − 2 =

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Show Buttons
Hide Buttons