Agile Budgeting – Followup

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Here’s a few more resources that have surfaced since my post on Agile Budgeting / Startup Cash Flow Management:

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.