By Jim Gallagher, President Jim Gallagher Consulting
Budget phobia, the fear of budgets, plagues many studio owners. Owners claim they are not numbers people, or don’t understand how to put spreadsheets together or feel that budgets are a useless exercise that is done once a year and thrown in a drawer.
Many studio owners view budgets as a mysterious set of complicated mathematical formulas that only accountants and statisticians can decipher. Budgets are nothing more than simple spreadsheets based on data and goals that use basic math. If you can add, subtract, multiply, and divide you can create and use a budget.
There are many tools you can use to operate and manage your business. The most basic tool is the budget. Many studio owners fail to make or use a budget. Some months they have extra money and life is great. Money is available for payroll and there is extra for the owner. A poor month brings the stress of meeting payroll and paying rent. Using budgets properly can help owners not overspend during good months and assure there is money available during tight months.