E2: Ecommerce Budgeting & Forecasting: What, Why, How, When, and Who
In this episode of the Ecommerce Finance Podcast, Stephen Brown and Preston Alder discuss the critical aspects of budgeting and forecasting in ecommerce.
They explore the importance of understanding cash flow, the phases of financial management, and the strategies for building effective budgets and forecasts.
They emphasize the need for accurate accounting and the flexibility required in planning to adapt to changing business conditions.
Ultimately, they highlight how a structured approach to budgeting and forecasting can lead to profitable growth and reduced stress in managing a business.
Sound Bites
- "Cash is king."
- "The budget is a P&L forecast."
- "Winging it only gets you so far."
Takeaways
- Budgeting provides a clear picture of cash flow.
- Understanding cash flow is essential for daily decision-making.
- A structured budget helps in achieving profitable growth.
- Accurate financials are crucial for effective budgeting.
- Flexibility in planning allows for better adaptation to changes.
- The three phases of financial management are accounting, forecasting, and real-time measurement.
- Marketing and sales forecasts should be based on historical data.
- Cash flow forecasting is vital for inventory management.
- Regular reviews of budgets and forecasts help identify issues early.
- Building a budget requires collaboration across different business functions.
Chapters
00:00 Introduction to Budgeting and Forecasting
02:32 The Importance of Budgeting in Business
05:13 Understanding Cash Flow and Its Impact
07:39 The Three Phases of Financial Management
10:22 Building a Budget: The How and Who
12:55 Marketing and Sales Forecasting Strategies
15:35 The Role of Agencies in Marketing
18:17 Lessons Learned from Outsourcing Marketing
20:52 Forecasting for Growth: The 10 Million Dollar Brand
21:59 Annual Cash Flow Forecasting: Strategies and Scenarios
24:13 The Importance of Team Collaboration in Financial Planning
26:01 Navigating Cash Flow and Budgeting Challenges
28:31 The Role of Profitability in Business Growth
30:36 Planning vs. Plans: The Importance of Strategic Flexibility
35:11 The Impact of Profit Focus on Business Operations
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