Budgeting 101:
How To Nail Your Numbers with the Bottoms Up Budget
Emma Bowdler
I’m a cheerleader for women and an accountant bursting with personality.
Let’s face it, you read the word ‘budget’ and immediately, your eyes glazed over. We don’t blame you. Hardly the stuff of a steamy romance novel, even if you do love being a woman in biz for herself.
But if you can hold off on the eye roll for a hot minute — the way we see it, budgeting is at the heart of any profitable business. Mastering the art of the budget isn’t just about keeping your finances in check – it’s about empowering yourself to make informed decisions and drive your business forward — eyes wide open (and glasses full).
Over the years, we have perfected a tool that transforms budgeting from a daunting chore into your BFF for sustainable growth and increased profitability. Enter: the Bottoms Up Budget, a powerful way to simplify your finances, slay your numbers, and get ready to toast your business success. Let’s dive in.
Why Is Budgeting Important?
Without a budget, it’s easy to find yourself overspending, spending on things that don’t actually move the dial in your business, and letting money (or opportunities) slip through your fingers, which can really pile on the stress. Of course, it’s not a solve-all, but there are some really important reasons why having a budget is critical to running a business:
Financial Clarity and Control:
Think of a budget as your financial GPS — it shows you exactly where your money’s heading, from the cash flowing in to what’s going out.
Getting a handle on this means you can make more aligned choices, cut unnecessary expenses, and kiss goodbye to those WTAF money moments.
Cash Flow Management:
A business owner who hasn’t torn hair out over cash flow at some point is a unicorn. Nice to imagine, but they just don’t exist.
Effective budgeting ensures that you’re not just tracking expenses and income but also timing them. Understanding your cash flow patterns helps ensure that you have enough liquidity to cover debt payments without compromising operational funds.
This might mean adjusting payment terms with clients or suppliers to better align with your repayment schedule and help you avoid the cash crunch. Hello: sleep at night.
Goal Setting
(and actually achieving them):
Want to launch a new product or open another location? Your budget can help. Setting up a budget spreadsheet is like planting little money seeds for your dreams.
The process of allocating funds specifically for your goals and objectives creates tangible and achievable milestones, keeping you and your team jazzed and on target.
Keeping a handle on your Debt and Liabilities:
To us, a budget is all about giving every dollar a job – some for spending, some for saving, and some for chipping away at those debts.
Having an eye for debt in your business budget isn’t just about getting out from under what you owe; it’s about building a foundation from which your business can move forward with more freedom, less stress, and a clearer path to growth — whatever that looks like for you.
Emergency Preparedness:
Just like life, business loves to throw you curveballs. Having a solid budget is one way to ensure you have a safety net ready to catch you when those pesky balls come flying your way. Setting aside a stash of cash for those ‘just-in-case’ moments means you won’t have to sweat the small (or big) surprises, from a sudden computer breakdown to an unexpected hiccup in a product launch.
Budgets aren’t magic, but there is absolutely something to be said for the calm that comes from knowing your finances are under control (or at least you know what’s going on). You want a business where you call the shots, and a budget can help you do that.
What is the Bottoms Up Budget?
At The Women’s Accountant, we’re not your ordinary bean counters, and so we don’t just like to follow any ol’ budgeting method. Instead, we’ve created a Bottoms Up Budget — a simple tool designed to help you build a successful and scalable business on your terms, step-by-step and sip-by-sip.
Unlike traditional top-down approaches to budgeting, the Bottoms Up Budget is true to its name — starting with your end goal and working your way backwards. It’s bottoms up and ass first.
Instead of focusing on what you have now and allocating funds from there, we focus on what you want to end up with (that big, hairy, audacious goal) and plot a path to achieving it. This allows you to make informed decisions with a clear understanding of how each dollar spent is a step towards your larger financial goals.
What’s Great About This Approach?
There is honestly so much to love about this approach to budgeting, but if we had to boil it down to three, these are it:
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It Puts Your Goals First:
Way before the Matildas took the country by storm, women have been kicking goals all over the place, and we get a front row seat every day. We love how goals help keep us motivated, and the Bottoms Up Budget puts them front and centre.
🔮
Keeps the Past in Mind:
They say that the best predictor of future behaviour is past behaviour. And while we always reserve a woman’s right to change her mind (and her money decisions), starting with your past year’s worth of expenses can be a great way to use data from your past to make more informed decisions about the upcoming year.
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Flexibility at its Finest:
While we may no longer be able to touch our toes without our backs reminding us that we’re getting older, this super-flexi Bottoms Up Budget moulds perfectly to fit your business’ every twist and turn.
From spontaneous marketing campaigns to unexpected costs, this is a budgeting approach that dances to your rhythm. It enables you to easily make adjustments based on what’s happening in your business and allows for real-time feedback or changes from clients and customers.
How Is It Different To
Other Budgeting Methods?
Our Bottoms Up Budget method is different to traditional budgeting approaches in a few ways.
Firstly, most conventional budgeting methods begin with your current income and expenses, then work towards saving whatever is left. But you and your business is worth more than just leftovers, queen! Instead, we start with the end goals or desired income first and reverse engineer your budget to align with your personal or business financial goals, rather than just managing what’s already there.
In traditional budgeting, you also tend to allocate funds based on historical spending or industry standards. With this method however, you justify each expense based on how it’s getting you closer to your end goals. This means every dollar spent is given a purpose. Each spend is validated and allocated strategically, rather than merely categorising and tracking where your moolah is flowing (or leaking!).
Traditional budgets can also be hella rigid, with fixed categories and allocations. However, even though the Bottoms Up approach is structured, it offers more flexibility. That’s because it’s goal-driven, so you can adjust categories and funds as your priorities shift or market conditions change.
And lastly, it moves away from that old school view of a budget as being restrictive, or a list of what you can’t do. By focusing on goals and desired outcomes, the Bottoms Up Budget shifts the narrative from cutting back to building up, from what you need to curb to what you can achieve. YAS, we love to see it!
Success Stories
Ok, so you’re sold on the Bottoms Up approach to budgeting. But how are women using it to *actually* move the dial in their business? Let’s hit it with a couple of recent use cases from our fabulous clients (*names have been changed, but numbers and stories are realsies).
Case Study 1: Creativa Consultants*
Digital marketing agency, Creativa Consultants*, had been hitting the supercalifragilistic $1M revenue mark, consistently for the last three years running. However, their profit margins were less impressive, lingering below $50K annually. Ouch. Every time we chatted with fabulous owner, Ava*, usually around tax planning time, she was so overwhelmed and felt unable to take time off, which is such a red flag for business owners that we see time and time again.
Despite high revenue, the business just had so many expenses that were eating into profits, but Ava and her team struggled to identify where cuts could be made without impacting the quality of the service they provided.
In a session with our Founder and Head Bean Counter, Emma, Ava adopted the Bottoms Up Budget approach, starting with a personal goal of a 4-week vacation, and a business goal of doubling her profit, which required boosting their margins considerably.
Together, we reviewed the last 12 months of finances, identifying non-essential expenses and areas with inflated costs, like unused software subscriptions and inefficient ad spending. She then worked backward to figure out the necessary adjustments in service pricing, client contracts, and cost reduction to meet her profit goal — and suddenly that family holiday to her native Greece wasn’t looking like such a pipe dream after all!
Reallocating resources towards higher-return activities, such as client retention programs and targeted marketing campaigns, literally within six months, Creativa Consultants* saw a profit increase to $120K. We knew it would work, but we didn’t think it would work that quickly!
In a few months time, Ava is fiiiiiiiinally about to take that damn holiday (granted it’s going to be 3 weeks not 4), but we know she’ll return to a more efficient, profitable business with improved cash flow and a happier team.
Bottoms up!
Case Study 2: Bright Path Tutoring*
Ok, so our next epic success story happened in late 2023. Lisbeth* is a local tutor in Toowoomba, all-round delightful human and sole proprietor of Bright Path Tutoring. Consistently having more enquiries than she could follow up with, she really wanted to expand her reach by adding to her team, but figured she couldn’t afford it.
Deciding to give the Bottoms Up Budget a shot after one of our Business Growth Strategy Sessions in 2022, we focused on her expansion goal – hiring a subcontractor and built the spreadsheet out from there. We calculated she needed an extra $2,000 a month to cover a subcontractor’s fees without sacrificing her own salary.
Looking at her current pricing and service offerings, she realised she could tweak one of them and increase her revenue without significant additional hours. Of course, a little trim of the unnecessary spending wouldn’t hurt, so she did away with her expensive email marketing software and switched insurance companies, reallocating those funds towards hiring help.
It took 10-12 weeks for her to feel confident enough to pull the trigger, and then Lisbeth was able to bring a subcontractor on board on a per-hour basis. Sure, there was the odd hiccup here and there as they got into their stride, but together they expanded her student base by 27% and increased her monthly income by $3,500 (more than enough to cover the new seat). We’ll drink to that!
It took 10-12 weeks for her to feel confident enough to pull the trigger, and then Lisbeth was able to bring a subcontractor on board on a per-hour basis. Sure, there was the odd hiccup here and there as they got into their stride, but together they expanded her student base by 27% and increased her monthly income by $3,500 (more than enough to cover the new seat).
We’ll drink to that!
Ready to Try It for Yourself?
If you’re not just the teensiest bit curious about the transformative power of the Bottoms Up Budget by now, then, wow — you’re hard to impress.
If you’re keen to turn those dreams into actionable, profitable realities, then we are ready to toast your success and share everything we got on budgeting, Bottoms Up style.
But wait, there’s more! (Said in our very best game show host voice). Because we know that starting can be the hardest part, we’re not just giving you the template; we’re also providing you with an exclusive Loom video tutorial that walks you through every step of how to use it effectively.
Think of it as having your business BFF right there with you, guiding you through the process, and helping you ‘taylor’ it swiftly to meet your business goals.
Download your FREE Bottoms Up Budget:
And let’s get crack-a-lackin’ on building
a business by design with freedom as the bottom line!
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