Why don’t you have a budget?
Ok here are some of the drivers I can see for people avoiding budgeting:
If I have a budget I am accountable. Most of us value our independence as self-employed people. Once there is a budget there are targets for us to measure ourselves against. For example we set a sales target each month in a budget. When we move back to our role of marketing person, we suddenly have an accountability to meet that target. At a very basic level if we produce lousy results, they only show up as lousy against a target.
We have to confront what doesn’t work about our business. If there is a problem in our business it will emerge in a budget. That can be an uncomfortable.
We have to think things through. As Henry Ford said ‘Thinking is the hardest work there is.’ Our brains are designed to follow patterns. Getting them to consider new thoughts is hard work. A good budget is inherently a creative process and forces you to examine all your assumptions. That takes mental effort.
We can stay safe. Most of us are afraid of success. A budget will throw up opportunities to succeed. That can be equally as uncomfortable as confronting the problems in our business.
We do not have to challenge our opinions. Most of us have strong views about the way things are in our business. As you will see the process of budgeting entails re-examining our preconceived opinions. It may require letting go of cherished positions that we hold about the way things are.
If we employ people, the lack of a budget also allows us to make up the rules as we go along. If your sales team are meeting their targets you have less scope to tear a strip off them.
There may be more reasons I haven’t thought of but can you see there are powerful psychological forces at play that explain why so few of us have a budget?
Ok, we can now sum up the advantages of not having a budget which are:
- I don’t have to be accountable
- I am free to make it up as I go along
- I don’t have to confront what doesn’t work
- I don’t have to think
- I can avoid feeling uncomfortable
- I can hold onto my ways of doing things and opinions
- I can bully others when I feel like it
If that sounds harsh please understand that I am hoping to shake us out of our habit of not budgeting because the benefits of having one are potentially so great.
In the next article I will cover the six benefits to having a budget.