Making Money Cash

Sharon Eisenhauer never thought she would understand budgeting when she was preparing to launch Haiku, her Oakland, California, company making functional, feminine bags for the outdoor recreation market. But once Haiku was up and running, she says, "everything clicked."

"Our budget has been an incredibly useful tool, especially for a product-based business," says Eisenhauer, whose sales are at $1.4 million after six years. "I couldn't do this without it."

An annual budget may seem like the least sexy part of a business – far less interesting, say, than the signature recipes of a restaurant or the cutting-edge apps produced by a software venture. Yet creating a realistic budget and paying attention to it throughout the year can mean the difference between business success and failure.

"Having a budget stacks the odds in your favor dramatically," says Vicki Suiter, a business consultant with Suiter Financial Systems in Novato, California. "It helps you make happen what you want to have happen."

Businesses need two kinds of annual budgets: an operating budget focused on profitability, and a budget focused on cash flow.

Setting an Annual Budget: The Road Map to Profitability

An operating budget is a prediction of all expected revenues and expenses over a 12-month period. It projects your gross and net sales, along with your net profits or losses.

On the expense side, it includes both one-time expenditures such as equipment purchases and ongoing costs such as rent.

Some expenses commonly included in budgets are:

• Rent


• Insurance


• Personnel, including payroll taxes


• Costs of purchasing or producing your product


• Sales and marketing


• Phone, Internet, and utilities


• Repairs and maintenance


• Outside services (accounting, legal etc.)


• Fees and licenses


• Interest


• Depreciation


• Office supplies


• Company vehicles, travel

An operating budget allows you to try out different assumptions in advance for variables like pricing and staffing, so you can take your best shot at making a healthy profit.           

"I tell my clients to create three scenarios – best case, worst case, and middle of the road," says Michelle Long, a CPA and business consultant with Long for Success in Kansas City, Missouri. "Their budget helps them identify potential problems that may hamper their chances for success. They can plan for them, or adjust their business model to make it work."

It's relatively easy to create a profit-and-loss budget with accounting software such as QuickBooks. There are also free budget templates available online from organizations like SCORE.

Dig Deeper: 12 Best Tools for Budgeting

Setting an Annual Budget: Cash Flow is King

Novice business owners sometimes neglect the second kind of budget: a cash-flow budget. But in fact, it is problems with cash flow rather than profitability that cause many new businesses to fail.

Positive cash flow means you have enough money on hand to pay your bills at any given point in the year. A business can be profitable but still have cash-flow problems if, for instance, it has to shell out money in advance for inventory but doesn't receive payment from buyers until months later.

"You can operate at a loss for a while – a lot of small businesses do when they start out – but you can't operate with a negative cash flow," Long says.

To create a cash-flow budget, start with the assumptions about income and expenses that you developed for your operating budget. Then figure out, month by month, when you can expect to receive payments and when you'll have to pay bills.

"You may bill clients this month but not collect from them for 60 or 90 days," says Suiter. "If you can see beforehand that you'll be short of cash, you can arrange to get a line of credit, or borrow money, or pay (bills) out of your personal reserve."

You can use a spreadsheet program like Excel to create a cash flow budget, or use a template like this one from the U.S. Small Business Administration.

Dig Deeper: How can I Create a Reliable Cash-flow Budget?

Setting an Annual Budget: The Start-up Budget Challenge

Ongoing businesses can use the prior year's financial data as a starting point in setting next year's budget.  But start-ups don't have this advantage. They've got to come up with all their budget numbers from scratch. Some questions you should ask yourself include: How much should we charge for your product or service? How many units of it will we be able to sell in our first year? How much will we need to spend on inventory or production? How many employees will we need, and what will they cost when we add in payroll taxes, workers' comp insurance, and benefits?

Owners of start-up businesses should do detailed research on their industry, their competition and their target market to answer these kinds of questions.

Talk to owners of similar ventures that are not your direct competitors. Look at aggregate industry data: You can find free financial benchmarks for a number of industries at Biz Stats, or at some other sites mentioned by Long in her blog.

Get exact numbers in advance for as many of your costs as possible. "Talk to a broker to find out exactly what your insurance costs will be. If you're going to have a Web site, find out exactly how much it will cost to maintain," says Emily Gasner, a business coach with Working Solutions in San Francisco.  

What a truly brutal election. One rare exception was the crushing of Texas Oil's Proposition 23 in California (see CREDO's campaign at stoptexasoil.org), which proves that even unlimited corporate cash can be beaten back -- if it is disclosed and fought by grassroots mobilization.

At CREDO, we fight hard on the issues, but we don't take sides in partisan elections. As someone who cares about progressive issues, there is no doubt that Tuesday's results will make for even harder times for our country. It is crazy making to realize just how extreme and misinformed much of the new Congress will be.

There is little reason to expect any useful legislation from the Tea Party-dominated House or the dysfunctional Senate. Swing votes in the Senate have really troublesome names: Lieberman, Nelson, Manchin, and Pryor. In fact, this Congress will do damage to anything even remotely progressive.

So let's take a look at what happened and what we can do now. The media, unfortunately but not surprisingly, will be of no use in making sense of Tuesday's results, and even less so in helping chart a course for the future.

There is a lot of evidence that the state of the economy, and employment in particular, drive the results of elections -- and this one was no exception. As the saying goes, "If you think the economy is working, ask someone who isn't." We have an economy stuck in a deep ditch, with corporate profits and bank bonuses soaring while long-term unemployment is at near Depression levels.

The Republicans shrunk the first "stimulus" package and filled it with tax breaks, even as corporate Democrats helped them along, blocking any effort to restructure mortgages in bankruptcies, freeze foreclosures or force banks to lend money. The election outcome was partially baked in early 2009, when the White House preemptively conceded on the scale and provisions of the stimulus package and chose to coddle the banks. To watch this unfold was simply maddening.

Making matters worse were other factors. Among the most damaging were the actions of the conservative majority on the Supreme Court, which seemed energized by the new President, and took the radical step of rehearing a campaign finance case -- now known forever as Citizens United. In ruling 5-4 that corporations have the right to spend unlimited amounts of money for and against candidates, the Court transformed the electoral landscape in a way potentially more profound than its 5-4 ruling that seated George W. Bush as president. As many predicted, the Citizens United ruling unleashed the greatest wave of corporate spending in history, though it's a safe bet to say that their spending in 2012 will make this year's outlay look modest.

In an astonishing turn of events, the right wing was able to kill -- essentially murder in public view -- the organization that registered millions of poor and working class African-American and Hispanic voters in the last six years. I am speaking of ACORN, of course. By editing video completely out of context, and using the right-wing media machine to perfection, Andrew Breitbart was able to convince the mainstream media and eventually Congress, that ACORN was an election-stealing organization that had no qualms giving advice to pimps on how to increase revenues. Fulfilling Karl Rove's wildest dreams, Congress, including most Democrats, voted to block public funding for any of ACORN's laudable and effective housing or tax assistance programs, and ACORN died a quiet death. There would be no millions of new registrants.

Traditions are important in the Senate, but almost always to the detriment of progressive change. The health care reform effort was a victim of Senate conventions. Sen. Max Baucus of Montana, who chairs the critical Senate Finance Committee solely due to his long tenure, stalled development of a health reform package for many months in order to "negotiate" with Republicans on his committee. They weren't interested in the least, and walked away from the discussions muttering bizarre comments about reforms "killing grandma" and setting up "death panels" because Sarah Palin says so. The behavior of Baucus would be laughable if it were not so utterly destructive.

No matter what one thought of FOX News in the 2008 election, Murdoch's monster went on a rampage over the past two years. Serving as both an instigator and an amplifier for the craziest and most offensive pundits, FOX News misled and misinformed the American people on every issue, and effectively became the public face of the Republican Party. Glenn Beck's show became so toxic and spewed so much venom that one of his devoted fans took it upon himself to plot the execution of key leaders of the Tides Foundation and the ACLU, who had figured prominently in Beck's rants. Fortunately, the madman (the fan, not Beck) was stopped before he accomplished his mission.

We could go on, of course, on all the missed opportunities, the cave-ins, the sell outs, and the unpopular and misguided war in Afghanistan.

But the results are in. The House of Representatives is in the hands of the most corrupt Speaker-in-waiting ever, the Tea Party is ascendant, and the U.S. Senate, however dysfunctional it has been, is poised to be much worse.

For those of us who had hopes that the Obama Administration could seize the moment and enact popular progressive changes, this is a bitter pill. And like many, we grieve at the lost opportunities.

But now we need to brush off the dust, suck it up, and plunge back into substantive fights. Politics is not fair -- indeed, U.S. elections are rigged in profound ways! But walking away is not an option at CREDO Action, and we hope you will join us in some of the actions below we think are strategic in the new political landscape:

1. Commit to Taking Down FOX News. So long as FOX News has any credibility within the Beltway, it will be a pipeline for malicious material that will poison our political culture. Join our friends at Color of Change.

2.Tell the Senate to pass the DISCLOSE Act during the lame duck session. We were able to defeat the Texas Oil Initiative, Prop 23 in California, in part because we knew who the enemy was -- having disclosure of corporate contributions brings the enemy out in the open for us to take on and fight. The DISCLOSE Act passed the House and came within a single vote of passing the Senate. One vote. You can join this fight by taking action with Public Citizen at http://citizen.org/disclose-act-action.

3. Keep fighting to end the Bush tax cuts for the wealthiest Americans. This issue will get resolved during the lame duck session. Take action here.

4. Sign up for the fight for a constitutional amendment to reverse the Citizens United decision by declaring that corporations do not have the legal rights of humans. This may take years, if not decades, but we should start now. Please join Free Speech for People: http://freespeechforpeople.org/.

5. Tell the FCC to use its existing authority to establish and defend net neutrality. Our friends at Free Press are leading this charge: here.

6. Demand that the Department of Justice and the Internal Revenue Service investigate the political organizations set up by Karl Rove to launder millions of dollars in secret cash to change the outcome of elections. Act now at http://act.credoaction.com/campaign/investigate_crossroads.

7. Defend the EPA from castration by pro-coal interests in Congress. The EPA accomplished almost nothing during the Clinton years because the Gingrich-led Congress used the budget process to prohibit the agency from doing its work. This battle has already started. The Sierra Club's Beyond Coal campaign is a great way to join this fight: http://sierraclub.org/coal.

8. Convince the Obama administration to stop appealing progressive court rulings on matters like the Defense of Marriage Act, Don't Ask Don't Tell, and the state secrets defense against torture and wiretapping. Urge the Department of Justice to change its approach at http://act.credoaction.com/campaign/stop_appealing.

9. Urge Democratic senators to do away with lifetime tenure for committee chairs and open up all chair positions to majority vote elections. This will go a long way towards more progressive legislation. Take action with us here.

10. Demand that the Department of Justice enforce the provisions of the national voter registration law that require state governments to offer to register all voters at departments of public welfare and motor vehicles. Many state governments simply ignore these requirements and this is a cheaper and more inclusive way of registering voters than the campaigns of the now dead ACORN. Urge Attorney General Eric Holder to expand voter registration: http://credoaction.com/campaign/enforce_motor_voter.

I suspect you are angry and exhausted at this point. I know I am. But let us not forget that the values and ideals we fight for are greater than any one election. They still endure, and so must our fight. We have a lot of work to do.

Michael Kieschnick, CEO

CREDO Action

eric seiger

<b>News</b> Flash! Chris Christie&#39;s got junk in the trunk | The Daily <b>...</b>

Christie critics turn to weightiest issues when attacking governor.

Wednesday Morning Fly By: NHL and Phantoms <b>News</b> - Broad Street Hockey

Today's open discussion thread, complete with your daily dose of Philadelphia Flyers news and notes... Remembering Pelle Lindbergh: [Flyers Faithful]; Looking at Peter Laviolette's impact on the Flyers: ...

Cee-Lo Green sings &#39;Fox <b>News</b>&#39; on &#39;Colbert Report&#39; - The Dish Rag <b>...</b>

With William Shatner and possibly Gwyneth Paltrow taking a stab at “F*** You,” Cee-Lo Green shows them how it's done.The musician appears on Comedy Central's...

eric seiger

Sharon Eisenhauer never thought she would understand budgeting when she was preparing to launch Haiku, her Oakland, California, company making functional, feminine bags for the outdoor recreation market. But once Haiku was up and running, she says, "everything clicked."

"Our budget has been an incredibly useful tool, especially for a product-based business," says Eisenhauer, whose sales are at $1.4 million after six years. "I couldn't do this without it."

An annual budget may seem like the least sexy part of a business – far less interesting, say, than the signature recipes of a restaurant or the cutting-edge apps produced by a software venture. Yet creating a realistic budget and paying attention to it throughout the year can mean the difference between business success and failure.

"Having a budget stacks the odds in your favor dramatically," says Vicki Suiter, a business consultant with Suiter Financial Systems in Novato, California. "It helps you make happen what you want to have happen."

Businesses need two kinds of annual budgets: an operating budget focused on profitability, and a budget focused on cash flow.

Setting an Annual Budget: The Road Map to Profitability

An operating budget is a prediction of all expected revenues and expenses over a 12-month period. It projects your gross and net sales, along with your net profits or losses.

On the expense side, it includes both one-time expenditures such as equipment purchases and ongoing costs such as rent.

Some expenses commonly included in budgets are:

• Rent


• Insurance


• Personnel, including payroll taxes


• Costs of purchasing or producing your product


• Sales and marketing


• Phone, Internet, and utilities


• Repairs and maintenance


• Outside services (accounting, legal etc.)


• Fees and licenses


• Interest


• Depreciation


• Office supplies


• Company vehicles, travel

An operating budget allows you to try out different assumptions in advance for variables like pricing and staffing, so you can take your best shot at making a healthy profit.           

"I tell my clients to create three scenarios – best case, worst case, and middle of the road," says Michelle Long, a CPA and business consultant with Long for Success in Kansas City, Missouri. "Their budget helps them identify potential problems that may hamper their chances for success. They can plan for them, or adjust their business model to make it work."

It's relatively easy to create a profit-and-loss budget with accounting software such as QuickBooks. There are also free budget templates available online from organizations like SCORE.

Dig Deeper: 12 Best Tools for Budgeting

Setting an Annual Budget: Cash Flow is King

Novice business owners sometimes neglect the second kind of budget: a cash-flow budget. But in fact, it is problems with cash flow rather than profitability that cause many new businesses to fail.

Positive cash flow means you have enough money on hand to pay your bills at any given point in the year. A business can be profitable but still have cash-flow problems if, for instance, it has to shell out money in advance for inventory but doesn't receive payment from buyers until months later.

"You can operate at a loss for a while – a lot of small businesses do when they start out – but you can't operate with a negative cash flow," Long says.

To create a cash-flow budget, start with the assumptions about income and expenses that you developed for your operating budget. Then figure out, month by month, when you can expect to receive payments and when you'll have to pay bills.

"You may bill clients this month but not collect from them for 60 or 90 days," says Suiter. "If you can see beforehand that you'll be short of cash, you can arrange to get a line of credit, or borrow money, or pay (bills) out of your personal reserve."

You can use a spreadsheet program like Excel to create a cash flow budget, or use a template like this one from the U.S. Small Business Administration.

Dig Deeper: How can I Create a Reliable Cash-flow Budget?

Setting an Annual Budget: The Start-up Budget Challenge

Ongoing businesses can use the prior year's financial data as a starting point in setting next year's budget.  But start-ups don't have this advantage. They've got to come up with all their budget numbers from scratch. Some questions you should ask yourself include: How much should we charge for your product or service? How many units of it will we be able to sell in our first year? How much will we need to spend on inventory or production? How many employees will we need, and what will they cost when we add in payroll taxes, workers' comp insurance, and benefits?

Owners of start-up businesses should do detailed research on their industry, their competition and their target market to answer these kinds of questions.

Talk to owners of similar ventures that are not your direct competitors. Look at aggregate industry data: You can find free financial benchmarks for a number of industries at Biz Stats, or at some other sites mentioned by Long in her blog.

Get exact numbers in advance for as many of your costs as possible. "Talk to a broker to find out exactly what your insurance costs will be. If you're going to have a Web site, find out exactly how much it will cost to maintain," says Emily Gasner, a business coach with Working Solutions in San Francisco.  

What a truly brutal election. One rare exception was the crushing of Texas Oil's Proposition 23 in California (see CREDO's campaign at stoptexasoil.org), which proves that even unlimited corporate cash can be beaten back -- if it is disclosed and fought by grassroots mobilization.

At CREDO, we fight hard on the issues, but we don't take sides in partisan elections. As someone who cares about progressive issues, there is no doubt that Tuesday's results will make for even harder times for our country. It is crazy making to realize just how extreme and misinformed much of the new Congress will be.

There is little reason to expect any useful legislation from the Tea Party-dominated House or the dysfunctional Senate. Swing votes in the Senate have really troublesome names: Lieberman, Nelson, Manchin, and Pryor. In fact, this Congress will do damage to anything even remotely progressive.

So let's take a look at what happened and what we can do now. The media, unfortunately but not surprisingly, will be of no use in making sense of Tuesday's results, and even less so in helping chart a course for the future.

There is a lot of evidence that the state of the economy, and employment in particular, drive the results of elections -- and this one was no exception. As the saying goes, "If you think the economy is working, ask someone who isn't." We have an economy stuck in a deep ditch, with corporate profits and bank bonuses soaring while long-term unemployment is at near Depression levels.

The Republicans shrunk the first "stimulus" package and filled it with tax breaks, even as corporate Democrats helped them along, blocking any effort to restructure mortgages in bankruptcies, freeze foreclosures or force banks to lend money. The election outcome was partially baked in early 2009, when the White House preemptively conceded on the scale and provisions of the stimulus package and chose to coddle the banks. To watch this unfold was simply maddening.

Making matters worse were other factors. Among the most damaging were the actions of the conservative majority on the Supreme Court, which seemed energized by the new President, and took the radical step of rehearing a campaign finance case -- now known forever as Citizens United. In ruling 5-4 that corporations have the right to spend unlimited amounts of money for and against candidates, the Court transformed the electoral landscape in a way potentially more profound than its 5-4 ruling that seated George W. Bush as president. As many predicted, the Citizens United ruling unleashed the greatest wave of corporate spending in history, though it's a safe bet to say that their spending in 2012 will make this year's outlay look modest.

In an astonishing turn of events, the right wing was able to kill -- essentially murder in public view -- the organization that registered millions of poor and working class African-American and Hispanic voters in the last six years. I am speaking of ACORN, of course. By editing video completely out of context, and using the right-wing media machine to perfection, Andrew Breitbart was able to convince the mainstream media and eventually Congress, that ACORN was an election-stealing organization that had no qualms giving advice to pimps on how to increase revenues. Fulfilling Karl Rove's wildest dreams, Congress, including most Democrats, voted to block public funding for any of ACORN's laudable and effective housing or tax assistance programs, and ACORN died a quiet death. There would be no millions of new registrants.

Traditions are important in the Senate, but almost always to the detriment of progressive change. The health care reform effort was a victim of Senate conventions. Sen. Max Baucus of Montana, who chairs the critical Senate Finance Committee solely due to his long tenure, stalled development of a health reform package for many months in order to "negotiate" with Republicans on his committee. They weren't interested in the least, and walked away from the discussions muttering bizarre comments about reforms "killing grandma" and setting up "death panels" because Sarah Palin says so. The behavior of Baucus would be laughable if it were not so utterly destructive.

No matter what one thought of FOX News in the 2008 election, Murdoch's monster went on a rampage over the past two years. Serving as both an instigator and an amplifier for the craziest and most offensive pundits, FOX News misled and misinformed the American people on every issue, and effectively became the public face of the Republican Party. Glenn Beck's show became so toxic and spewed so much venom that one of his devoted fans took it upon himself to plot the execution of key leaders of the Tides Foundation and the ACLU, who had figured prominently in Beck's rants. Fortunately, the madman (the fan, not Beck) was stopped before he accomplished his mission.

We could go on, of course, on all the missed opportunities, the cave-ins, the sell outs, and the unpopular and misguided war in Afghanistan.

But the results are in. The House of Representatives is in the hands of the most corrupt Speaker-in-waiting ever, the Tea Party is ascendant, and the U.S. Senate, however dysfunctional it has been, is poised to be much worse.

For those of us who had hopes that the Obama Administration could seize the moment and enact popular progressive changes, this is a bitter pill. And like many, we grieve at the lost opportunities.

But now we need to brush off the dust, suck it up, and plunge back into substantive fights. Politics is not fair -- indeed, U.S. elections are rigged in profound ways! But walking away is not an option at CREDO Action, and we hope you will join us in some of the actions below we think are strategic in the new political landscape:

1. Commit to Taking Down FOX News. So long as FOX News has any credibility within the Beltway, it will be a pipeline for malicious material that will poison our political culture. Join our friends at Color of Change.

2.Tell the Senate to pass the DISCLOSE Act during the lame duck session. We were able to defeat the Texas Oil Initiative, Prop 23 in California, in part because we knew who the enemy was -- having disclosure of corporate contributions brings the enemy out in the open for us to take on and fight. The DISCLOSE Act passed the House and came within a single vote of passing the Senate. One vote. You can join this fight by taking action with Public Citizen at http://citizen.org/disclose-act-action.

3. Keep fighting to end the Bush tax cuts for the wealthiest Americans. This issue will get resolved during the lame duck session. Take action here.

4. Sign up for the fight for a constitutional amendment to reverse the Citizens United decision by declaring that corporations do not have the legal rights of humans. This may take years, if not decades, but we should start now. Please join Free Speech for People: http://freespeechforpeople.org/.

5. Tell the FCC to use its existing authority to establish and defend net neutrality. Our friends at Free Press are leading this charge: here.

6. Demand that the Department of Justice and the Internal Revenue Service investigate the political organizations set up by Karl Rove to launder millions of dollars in secret cash to change the outcome of elections. Act now at http://act.credoaction.com/campaign/investigate_crossroads.

7. Defend the EPA from castration by pro-coal interests in Congress. The EPA accomplished almost nothing during the Clinton years because the Gingrich-led Congress used the budget process to prohibit the agency from doing its work. This battle has already started. The Sierra Club's Beyond Coal campaign is a great way to join this fight: http://sierraclub.org/coal.

8. Convince the Obama administration to stop appealing progressive court rulings on matters like the Defense of Marriage Act, Don't Ask Don't Tell, and the state secrets defense against torture and wiretapping. Urge the Department of Justice to change its approach at http://act.credoaction.com/campaign/stop_appealing.

9. Urge Democratic senators to do away with lifetime tenure for committee chairs and open up all chair positions to majority vote elections. This will go a long way towards more progressive legislation. Take action with us here.

10. Demand that the Department of Justice enforce the provisions of the national voter registration law that require state governments to offer to register all voters at departments of public welfare and motor vehicles. Many state governments simply ignore these requirements and this is a cheaper and more inclusive way of registering voters than the campaigns of the now dead ACORN. Urge Attorney General Eric Holder to expand voter registration: http://credoaction.com/campaign/enforce_motor_voter.

I suspect you are angry and exhausted at this point. I know I am. But let us not forget that the values and ideals we fight for are greater than any one election. They still endure, and so must our fight. We have a lot of work to do.

Michael Kieschnick, CEO

CREDO Action

eric seiger

<b>News</b> Flash! Chris Christie&#39;s got junk in the trunk | The Daily <b>...</b>

Christie critics turn to weightiest issues when attacking governor.

Wednesday Morning Fly By: NHL and Phantoms <b>News</b> - Broad Street Hockey

Today's open discussion thread, complete with your daily dose of Philadelphia Flyers news and notes... Remembering Pelle Lindbergh: [Flyers Faithful]; Looking at Peter Laviolette's impact on the Flyers: ...

Cee-Lo Green sings &#39;Fox <b>News</b>&#39; on &#39;Colbert Report&#39; - The Dish Rag <b>...</b>

With William Shatner and possibly Gwyneth Paltrow taking a stab at “F*** You,” Cee-Lo Green shows them how it's done.The musician appears on Comedy Central's...

eric seiger

eric seiger

eric seiger

<b>News</b> Flash! Chris Christie&#39;s got junk in the trunk | The Daily <b>...</b>

Christie critics turn to weightiest issues when attacking governor.

Wednesday Morning Fly By: NHL and Phantoms <b>News</b> - Broad Street Hockey

Today's open discussion thread, complete with your daily dose of Philadelphia Flyers news and notes... Remembering Pelle Lindbergh: [Flyers Faithful]; Looking at Peter Laviolette's impact on the Flyers: ...

Cee-Lo Green sings &#39;Fox <b>News</b>&#39; on &#39;Colbert Report&#39; - The Dish Rag <b>...</b>

With William Shatner and possibly Gwyneth Paltrow taking a stab at “F*** You,” Cee-Lo Green shows them how it's done.The musician appears on Comedy Central's...

eric seiger

Sharon Eisenhauer never thought she would understand budgeting when she was preparing to launch Haiku, her Oakland, California, company making functional, feminine bags for the outdoor recreation market. But once Haiku was up and running, she says, "everything clicked."

"Our budget has been an incredibly useful tool, especially for a product-based business," says Eisenhauer, whose sales are at $1.4 million after six years. "I couldn't do this without it."

An annual budget may seem like the least sexy part of a business – far less interesting, say, than the signature recipes of a restaurant or the cutting-edge apps produced by a software venture. Yet creating a realistic budget and paying attention to it throughout the year can mean the difference between business success and failure.

"Having a budget stacks the odds in your favor dramatically," says Vicki Suiter, a business consultant with Suiter Financial Systems in Novato, California. "It helps you make happen what you want to have happen."

Businesses need two kinds of annual budgets: an operating budget focused on profitability, and a budget focused on cash flow.

Setting an Annual Budget: The Road Map to Profitability

An operating budget is a prediction of all expected revenues and expenses over a 12-month period. It projects your gross and net sales, along with your net profits or losses.

On the expense side, it includes both one-time expenditures such as equipment purchases and ongoing costs such as rent.

Some expenses commonly included in budgets are:

• Rent


• Insurance


• Personnel, including payroll taxes


• Costs of purchasing or producing your product


• Sales and marketing


• Phone, Internet, and utilities


• Repairs and maintenance


• Outside services (accounting, legal etc.)


• Fees and licenses


• Interest


• Depreciation


• Office supplies


• Company vehicles, travel

An operating budget allows you to try out different assumptions in advance for variables like pricing and staffing, so you can take your best shot at making a healthy profit.           

"I tell my clients to create three scenarios – best case, worst case, and middle of the road," says Michelle Long, a CPA and business consultant with Long for Success in Kansas City, Missouri. "Their budget helps them identify potential problems that may hamper their chances for success. They can plan for them, or adjust their business model to make it work."

It's relatively easy to create a profit-and-loss budget with accounting software such as QuickBooks. There are also free budget templates available online from organizations like SCORE.

Dig Deeper: 12 Best Tools for Budgeting

Setting an Annual Budget: Cash Flow is King

Novice business owners sometimes neglect the second kind of budget: a cash-flow budget. But in fact, it is problems with cash flow rather than profitability that cause many new businesses to fail.

Positive cash flow means you have enough money on hand to pay your bills at any given point in the year. A business can be profitable but still have cash-flow problems if, for instance, it has to shell out money in advance for inventory but doesn't receive payment from buyers until months later.

"You can operate at a loss for a while – a lot of small businesses do when they start out – but you can't operate with a negative cash flow," Long says.

To create a cash-flow budget, start with the assumptions about income and expenses that you developed for your operating budget. Then figure out, month by month, when you can expect to receive payments and when you'll have to pay bills.

"You may bill clients this month but not collect from them for 60 or 90 days," says Suiter. "If you can see beforehand that you'll be short of cash, you can arrange to get a line of credit, or borrow money, or pay (bills) out of your personal reserve."

You can use a spreadsheet program like Excel to create a cash flow budget, or use a template like this one from the U.S. Small Business Administration.

Dig Deeper: How can I Create a Reliable Cash-flow Budget?

Setting an Annual Budget: The Start-up Budget Challenge

Ongoing businesses can use the prior year's financial data as a starting point in setting next year's budget.  But start-ups don't have this advantage. They've got to come up with all their budget numbers from scratch. Some questions you should ask yourself include: How much should we charge for your product or service? How many units of it will we be able to sell in our first year? How much will we need to spend on inventory or production? How many employees will we need, and what will they cost when we add in payroll taxes, workers' comp insurance, and benefits?

Owners of start-up businesses should do detailed research on their industry, their competition and their target market to answer these kinds of questions.

Talk to owners of similar ventures that are not your direct competitors. Look at aggregate industry data: You can find free financial benchmarks for a number of industries at Biz Stats, or at some other sites mentioned by Long in her blog.

Get exact numbers in advance for as many of your costs as possible. "Talk to a broker to find out exactly what your insurance costs will be. If you're going to have a Web site, find out exactly how much it will cost to maintain," says Emily Gasner, a business coach with Working Solutions in San Francisco.  

What a truly brutal election. One rare exception was the crushing of Texas Oil's Proposition 23 in California (see CREDO's campaign at stoptexasoil.org), which proves that even unlimited corporate cash can be beaten back -- if it is disclosed and fought by grassroots mobilization.

At CREDO, we fight hard on the issues, but we don't take sides in partisan elections. As someone who cares about progressive issues, there is no doubt that Tuesday's results will make for even harder times for our country. It is crazy making to realize just how extreme and misinformed much of the new Congress will be.

There is little reason to expect any useful legislation from the Tea Party-dominated House or the dysfunctional Senate. Swing votes in the Senate have really troublesome names: Lieberman, Nelson, Manchin, and Pryor. In fact, this Congress will do damage to anything even remotely progressive.

So let's take a look at what happened and what we can do now. The media, unfortunately but not surprisingly, will be of no use in making sense of Tuesday's results, and even less so in helping chart a course for the future.

There is a lot of evidence that the state of the economy, and employment in particular, drive the results of elections -- and this one was no exception. As the saying goes, "If you think the economy is working, ask someone who isn't." We have an economy stuck in a deep ditch, with corporate profits and bank bonuses soaring while long-term unemployment is at near Depression levels.

The Republicans shrunk the first "stimulus" package and filled it with tax breaks, even as corporate Democrats helped them along, blocking any effort to restructure mortgages in bankruptcies, freeze foreclosures or force banks to lend money. The election outcome was partially baked in early 2009, when the White House preemptively conceded on the scale and provisions of the stimulus package and chose to coddle the banks. To watch this unfold was simply maddening.

Making matters worse were other factors. Among the most damaging were the actions of the conservative majority on the Supreme Court, which seemed energized by the new President, and took the radical step of rehearing a campaign finance case -- now known forever as Citizens United. In ruling 5-4 that corporations have the right to spend unlimited amounts of money for and against candidates, the Court transformed the electoral landscape in a way potentially more profound than its 5-4 ruling that seated George W. Bush as president. As many predicted, the Citizens United ruling unleashed the greatest wave of corporate spending in history, though it's a safe bet to say that their spending in 2012 will make this year's outlay look modest.

In an astonishing turn of events, the right wing was able to kill -- essentially murder in public view -- the organization that registered millions of poor and working class African-American and Hispanic voters in the last six years. I am speaking of ACORN, of course. By editing video completely out of context, and using the right-wing media machine to perfection, Andrew Breitbart was able to convince the mainstream media and eventually Congress, that ACORN was an election-stealing organization that had no qualms giving advice to pimps on how to increase revenues. Fulfilling Karl Rove's wildest dreams, Congress, including most Democrats, voted to block public funding for any of ACORN's laudable and effective housing or tax assistance programs, and ACORN died a quiet death. There would be no millions of new registrants.

Traditions are important in the Senate, but almost always to the detriment of progressive change. The health care reform effort was a victim of Senate conventions. Sen. Max Baucus of Montana, who chairs the critical Senate Finance Committee solely due to his long tenure, stalled development of a health reform package for many months in order to "negotiate" with Republicans on his committee. They weren't interested in the least, and walked away from the discussions muttering bizarre comments about reforms "killing grandma" and setting up "death panels" because Sarah Palin says so. The behavior of Baucus would be laughable if it were not so utterly destructive.

No matter what one thought of FOX News in the 2008 election, Murdoch's monster went on a rampage over the past two years. Serving as both an instigator and an amplifier for the craziest and most offensive pundits, FOX News misled and misinformed the American people on every issue, and effectively became the public face of the Republican Party. Glenn Beck's show became so toxic and spewed so much venom that one of his devoted fans took it upon himself to plot the execution of key leaders of the Tides Foundation and the ACLU, who had figured prominently in Beck's rants. Fortunately, the madman (the fan, not Beck) was stopped before he accomplished his mission.

We could go on, of course, on all the missed opportunities, the cave-ins, the sell outs, and the unpopular and misguided war in Afghanistan.

But the results are in. The House of Representatives is in the hands of the most corrupt Speaker-in-waiting ever, the Tea Party is ascendant, and the U.S. Senate, however dysfunctional it has been, is poised to be much worse.

For those of us who had hopes that the Obama Administration could seize the moment and enact popular progressive changes, this is a bitter pill. And like many, we grieve at the lost opportunities.

But now we need to brush off the dust, suck it up, and plunge back into substantive fights. Politics is not fair -- indeed, U.S. elections are rigged in profound ways! But walking away is not an option at CREDO Action, and we hope you will join us in some of the actions below we think are strategic in the new political landscape:

1. Commit to Taking Down FOX News. So long as FOX News has any credibility within the Beltway, it will be a pipeline for malicious material that will poison our political culture. Join our friends at Color of Change.

2.Tell the Senate to pass the DISCLOSE Act during the lame duck session. We were able to defeat the Texas Oil Initiative, Prop 23 in California, in part because we knew who the enemy was -- having disclosure of corporate contributions brings the enemy out in the open for us to take on and fight. The DISCLOSE Act passed the House and came within a single vote of passing the Senate. One vote. You can join this fight by taking action with Public Citizen at http://citizen.org/disclose-act-action.

3. Keep fighting to end the Bush tax cuts for the wealthiest Americans. This issue will get resolved during the lame duck session. Take action here.

4. Sign up for the fight for a constitutional amendment to reverse the Citizens United decision by declaring that corporations do not have the legal rights of humans. This may take years, if not decades, but we should start now. Please join Free Speech for People: http://freespeechforpeople.org/.

5. Tell the FCC to use its existing authority to establish and defend net neutrality. Our friends at Free Press are leading this charge: here.

6. Demand that the Department of Justice and the Internal Revenue Service investigate the political organizations set up by Karl Rove to launder millions of dollars in secret cash to change the outcome of elections. Act now at http://act.credoaction.com/campaign/investigate_crossroads.

7. Defend the EPA from castration by pro-coal interests in Congress. The EPA accomplished almost nothing during the Clinton years because the Gingrich-led Congress used the budget process to prohibit the agency from doing its work. This battle has already started. The Sierra Club's Beyond Coal campaign is a great way to join this fight: http://sierraclub.org/coal.

8. Convince the Obama administration to stop appealing progressive court rulings on matters like the Defense of Marriage Act, Don't Ask Don't Tell, and the state secrets defense against torture and wiretapping. Urge the Department of Justice to change its approach at http://act.credoaction.com/campaign/stop_appealing.

9. Urge Democratic senators to do away with lifetime tenure for committee chairs and open up all chair positions to majority vote elections. This will go a long way towards more progressive legislation. Take action with us here.

10. Demand that the Department of Justice enforce the provisions of the national voter registration law that require state governments to offer to register all voters at departments of public welfare and motor vehicles. Many state governments simply ignore these requirements and this is a cheaper and more inclusive way of registering voters than the campaigns of the now dead ACORN. Urge Attorney General Eric Holder to expand voter registration: http://credoaction.com/campaign/enforce_motor_voter.

I suspect you are angry and exhausted at this point. I know I am. But let us not forget that the values and ideals we fight for are greater than any one election. They still endure, and so must our fight. We have a lot of work to do.

Michael Kieschnick, CEO

CREDO Action

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I had an interesting conversation with my boss today about people that make a living online. He's semi-old school, so he doesn't really understand (or believe) that so many people these days provide for their families from website revenue and such. As I rattled on and tried to explain to him how every day people are accomplishing this, he obviously didn't understand like I wanted him to, and after 15 minutes of Internet Marketing babble, he shocked me when he asked me if I could name 10 ways people make money online.

Sure, no problem, boss! So here is what I came up with:

1. First choice, obviously, was blogging. Of course, I had to explain the ways you can make money with a blog (paid reviews, selling ads, text link sales, etc...) I think I drove the point home, and it made more sense when I explained the concept to him. The key to making money with your blog is to stick with it no matter what. Add content, grow it, and start raking in the cash.

2. I had to mention Ebay. Ebay was the starting point some 7 years ago when I started to technically "make money online". I even tried to sell paper plates once...it was an addiction. Seriously though, the average American household has so much crap stored away, you'd be surprised at what you can dig out and sell for a few bucks. It all adds up!

3. Drop-shipping. This one wasn't hard to explain, and it relates to #2. Basically, a company that offers a drop-shipping program will allow you to sell their products at whatever price you want to sell them at (over their price) and put the profit in your pocket - and they'll also ship the product from their warehouse to the customers home, so you never physically touch any product. This was really popular a few years back, but due to extreme saturation of the market, it's died down some.

4. Sell your skills. Nothing is more in demand online, than talent. Can you write, design, code, or translate? There are literally thousands of people out there that need your help, and usually don't know where to go and find it. Here's the cool part - they'll pay you handsomely for you services! To start finding gigs in your specialty area, head over to the Digital Point forums - plenty of waiting customers! (Logos sell really, really well!)

5. Can you make stuff that sells? If you specialize in making robots out of toothpicks and forks, then why the hell aren't you selling them online through your own website? This tip is kind of obvious (after-all, it IS 2007), but if you have a unique product or service, then pay the $500 (more or less)to get a custom website, and start taking orders! Again, this is a real no-brainer, but sometimes people need reminding.

6. PPC campaigns. This one is one of my personal favorites that I've been testing lately. PPC (pay per click) are ads that you buy on search engines (Google Adwords) to promote a product or service - usually through an affiliate. Each time someone clicks on your ad and makes a purchase, you get a commission. This method can be tricky and potentially costly at first, but the key to success is test, test, and more tests. Get creative with your keywords and ads - make them stand out. Tweak your landing pages until your conversions pick up. Usually, you'll find success after a lot of trial and error. Just watch your spending at first, because it's very easy to lose money if you slack in the research department!

7. Own a popular website or blog? Sell advertising! Although this may seem obvious, there are still a surprising amount of sites that don't actively sell their available ad spots. Make sure you have a link or page that clearly describes your rates and available types of ads. I hate nothing more than when I click on someones advertising page, and all it has is a contact form. I'll pass on it nearly every time.

8.Write and sell an e-book! With digital products being one of the hottest selling items on the internet right now, what better time to create you own and start raking in the cash! Do you know how to make a grilled cheese sandwich using nothing but cheese, cardboard, and lighter? Write a book about it! Trust me, no matter what, someone will buy it. 9. Do you take pictures? If so, another hot selling item is your original photography. With a quick Google search, you'll find 20 sites that offer to buy your stock digital photos. Some even pay royalties when users download them. For those of you that have huge photo collections of interesting stuff, you're sitting on a goldmine.

10. Exploit the virtual gold trade in video games (a personal favorite!). There are millions of people who play online games such as World of Warcraft who do nothing but stash the in game currency and sell it in bulk to brokers who resell it to regular players. This is a HUGE market, and although the market is packed, it seems like there is always room for one more 'player'. Check out ige.com to see what I mean. That's it for now, there are many more ways to make money online, but these are some of the easier and more obvious ones. I didn't go into great detail for each method because it would take me 4 days to get it all down. I know that if you're reading this blog, you're search engine savvy enough to find out more information if you need it. Now get out there and start earning some extra money!


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Cee-Lo Green sings &#39;Fox <b>News</b>&#39; on &#39;Colbert Report&#39; - The Dish Rag <b>...</b>

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