EP235 – Budget Like a Boss with Clare Elliott and Ian Luckett

Now before you switch off thinking budgeting is just about spreadsheets and cutting back on your coffee spend, think again. Clare Elliott walks us through why budgeting, forecasting and cashflow management are the backbone of every high-performing, profitable MSP. It’s not about being an accountant. It’s about stepping into your CEO role and giving yourself the tools to make better, faster decisions with confidence.  Too often MSPs fall into the trap of looking at what’s in the bank and thinking that’s enough. But as Clare points out, without a proper budget, you’re flying blind. You might have cash now, but do you know what’s around the corner? Are you really in control of your business or just reacting to it? Budgeting allows you to reverse engineer your goals, spot the gaps early and drive the right actions. It’s confronting at times, yes. But the clarity it gives you is worth its weight in gold.  We talked about why so many business owners avoid budgeting altogether. The answer? It’s uncomfortable. It’s time consuming. And it forces you to look reality in the eye. But once you do, as I shared from personal experience, it becomes incredibly empowering. Just like mapping out your retirement plan, creating a budget gives you that sense of control and direction. And as Clare Elliott says so well, it’s all about having a clear destination and a route to get there.  When it comes to forecasting income, we broke down why simply relying on your monthly direct debits isn’t enough. Clare explained how even with recurring revenue, clients leave, services change and prices rise. Without a plan to add new clients or adjust pricing, your business starts moving backwards. So we explored how to break down income forecasting into manageable chunks: from what’s already secured, to potential upsell opportunities, to the leads you haven’t even generated yet. Clare made a really strong point here. If you’re standing still, you’re actually going backwards, especially if you’re not increasing prices annually.  We also got into the nitty gritty of budgeting for costs. From fixed overheads and vendor costs to salaries and project delivery, Clare Elliott laid out the foundations of building a practical budget. The advice was simple but powerful: start with what you know, build in contingency, and always allow for profit and savings. And if you’re not reviewing your projects after delivery, you’re probably leaving money on the table. It’s not just about quoting right the first time. It’s about learning and refining the process with every job.  Another brilliant insight from Clare was how budgeting drives change. Once you know what profit you want at the end of the year, you can work backwards to see what sales are needed and what activity has to happen to get you there. It’s not about hoping. It’s about planning. The budget becomes the engine room of your business, and it’s how you avoid that constant cycle of feast and famine.  We then moved on to how budgeting and forecasting translate into cashflow management. Because let’s face it, profit is great, but cash is king. You can be profitable on paper but still run out of money if clients pay late or vendors need paying early. Clare walked us through the importance of understanding timing, building up cash reserves and planning for VAT, PAYE and corporation tax well in advance. No surprises, no panic, just a clear picture of what’s coming.  We also covered what a typical finance function looks like as an MSP grows. Clare Elliott shared some cracking advice on when to bring in bookkeepers, management accountants or part-time finance directors, and what to expect at each stage of business maturity. Whether you’re turning over half a million or pushing past the seven-figure mark, having the right financial support in place can be a game changer.  We wrapped up with some solid troubleshooting tips for when things go off course. From negotiating with vendors to accelerating debtor collections, Clare gave us a toolkit to lean on in the tough times. But the consistent message throughout was clear: don’t bury your head in the sand. Budgeting is not a punishment. It’s a plan. And it’s the fastest way to create freedom, profit and peace of mind in your MSP.  So if you’re ready to stop winging it and start budgeting like a boss, go back and listen again. Build your first forecast. Book some time with your FD or accountant. Or reach out to us and we’ll help you figure out what steps to take next. As Clare Elliott so rightly put it, if you’re already doing well without a budget, just imagine what you could achieve with one.  Connect on LinkedIn HERE with Ian and also with Stuart by clicking this LINK  And when you’re ready to take the next step in growing your MSP, come and take the Scale with Confidence MSP Mastery Quiz. In just three minutes, you’ll get a 360-degree scan of your MSP and identify the one or two tactics that could help you find more time, engage & align your people and generate more leads.  OR   To join our amazing Facebook Group of over 400 MSPs where we are helping you Scale Up with Confidence, then click HERE  Until next time, look after yourself and I’ll catch up with you soon!