The Two Budgeting Methods That Transform My Clients’ Bottom Line
Published 9 days ago • 2 min read
Reader,
Shifting gears from book-writing to an important financial concept I use with nearly all my clients: budgeting. Not all budgets are created equal, and the type you choose can drastically affect how well you navigate a turnaround or simply grow your existing operation. Let’s dive into two budget methods that can revamp your business approach.
“A budget is telling your money where to go instead of wondering where it went.” – Dave Ramsey
1. Zero-Based Budgeting
What It Is: Start each financial period at zero and justify every expense from scratch.
Why It Matters: This forces you to question the necessity of each cost. No more rolling over last year’s expenditures without scrutiny.
Use Case: Particularly effective for businesses in turnaround mode, as it helps you identify hidden inefficiencies and free up cash for urgent priorities.
2. Operational Budgeting
What It Is: A more traditional approach where you base your new budget on historical data—like last year’s revenue, costs, and profit margins. You then adjust for projected changes.
Why It Matters: Great for stable businesses that need a roadmap without rebuilding everything from scratch. It offers structure and can still accommodate growth or operational tweaks.
Use Case: Ideal for companies with a track record and predictable expenses. It’s less intense than zero-based budgeting, but still requires you to track changes year over year.
Which One Is Right For You?
If you’re in crisis mode, zero-based budgeting might be your lifeline—it forces a lean mindset, ensuring every dollar spent has a direct return. If you’re looking for steady, incremental growth, an operational budget is likely enough—provided you stay diligent and adapt to market shifts.
Take Action
Pick a Method: Even if you start simple, the act of budgeting consistently is half the battle.
Review Monthly: A budget isn’t a “set it and forget it” tool; it’s a living document that needs regular updates.
Fresh Figures & Facts
Ever wondered which states are most (and least) eager to invest? A new study by Moneywise reveals where personal investment searches are highest—including how real estate consistently takes the top spot. These insights can help small business owners tailor marketing and product strategies to consumer interests in different regions.
Top 5 Most Investment-Focused States
Hawaii – 301.45 searches per 100k
Rhode Island – 289.81 searches per 100k
Vermont – 281.87 searches per 100k
New York – 266.81 searches per 100k
Delaware – 264.08 searches per 100k
5 States Least Interested in Personal Investments
Mississippi – 119.87 searches per 100k
Arkansas – 130.02 searches per 100k
Kentucky – 132.29 searches per 100k
Oklahoma – 134.78 searches per 100k
Louisiana – 138.15 searches per 100k
Why should these numbers matter to you?
Real estate emerges as the most-searched personal investment nationwide, signaling a consumer preference for tangible assets in uncertain times. With Massachusetts ranking ninth at 240.06 searches per 100k, local investors may be keeping an eye on property opportunities or related financial products.
How Small Business Owners Can Use This Data
Targeted Marketing: If you cater to real estate, construction, or home improvement, highlight your services in states where search interest is highest.
Product/Service Alignment: In regions with lower search volumes, you may need more educational content or marketing that emphasizes why investing is worth considering.
Cross-Promotions: Partner with real estate agents, mortgage brokers, or investment advisors in high-ranking states to tap into an actively interested audience.
Data courtesy of Moneywise, based on Google search volumes from January–August 2024.