Many small businesses operate without budgets and many small business owners get away with it because deep down, entrepreneurs and their bookkeepers/accounting managers usually have a good sense of their numbers. Why waste time developing a budget when there is so much other ‘real’ work to be done?

Now is the time to get a budget in place so that next year’s financial picture is in focus before this year’s end. This is the second in a five-part series where we present a little program to make the process a lot less painful. If you follow it, you will make more money.

Last month I got you started on next year’s budget by making your wish list. The next step is like making spaghetti: throw some numbers at your wish list and see what sticks. We’re talking big picture, rounded numbers here and very intentionally, I don’t want you to think too hard about what you “can” afford.

Specifically, put your wish list into spreadsheet format in Excel, and then assign to each your ‘guesstimate’. Hold your breath, add them up and then (when you have recovered) start cutting.

You have to develop a gut sense for how profitable your company is, and how much extra money you have to spend on, redeploy, invest in or borrow for your wish list. Use this type of background awareness to cull your wish list until it’s to scale and represents your company’s strategic goals for the next year or more.

What sets companies that budget apart is an understanding that budgets are not just about following the money. They are about leading the organization. Since there’s only so much money to go around they want to have a say in where it is going.

A word of final advice: get help with your budget. Engage your team in working the wish list, and instead of talking about strategic planning, you’ll be doing it.