Geof Harries (@geofharries of subvert.ca) pointed me at Pulse (pulseapp.com), which encapsulates much of my process in a nice web tool. I haven’t had the chance to try it out, but it looks like it captures the key steps of estimating, scheduling, repeating, and editing. One benefit of using our Excel spreadsheet was that we could do 30-second “what-if” experiments. Move a customer payment to a later date and see if you still make payroll. Increase your monthly billing by 10% and see if you can hire another developer. This flexibility and control is key to this being something you are willing to use.
Fred Wilson’s (@fredwilson) excellent MBA Mondays series has included a few posts that introduce the basic accounting reports of balance sheet, profit & loss, and cash flow. My post focused on the cash flow, as it’s the most important real-time report for a bootstrapped / low-capital startup. He also has his own post on Budgeting in a Small, Early-Stage Company. I’ll explain why I disagree with his recommendation (at least for the very early stages) but you should go read everything he’s written.
I still think that annual budgeting, as he recommends, is not useful in the early stages, when your business plan, revenue model and cost structure are changing frequently. Focus on your market fit, your repeatable revenue model, and watch your cash. Once you’ve accomplished those (reaching the Optimize and Scale levels of the Startup Pyramid – @seanellis) then your company will be static enough to spend the time on annual or semi-annual budgets.
Moving forward, I hope to crank out a few more posts on lean processes that I’ve used in the past so we can get away from old BDUF time wasters throughout the company.