Entrepreneurs Vs Corporate Drones - Budgeting - Part 2

I didn’t think that I’d write a Part 2 to the initial Entrepreneur Vs Corporate Drones - Budgeting article. But here we are. “sigh” I ran into another mind-boggling backwards logic that happens through out Corporate America.

Budgeting to fix problems.

That sounds harmless, right? I mean you can’t just throw all of your money at every problem. You’d have a great organization but no money. There’s always problems so that makes sense, right?

What I’m talking about is a whole level of stupid that is incomprehensible.

Let’s say you run an Amazon store that sells several million dollars a month in product. Along comes some dirty competition that knocks off your product and is selling it under YOUR BRAND NAME.

That’s right. Your label and everything. And they’re undercutting you on price. They have the buy box for some of your products and you’re losing hundreds of thousands of dollars a month. Let’s say roughly $200,000 to make it simple.

What do you do!?!

You reign fire and fury down on whoever is knocking off your products. If you have to hire a law firm and multiple detectives, you do it immediately. This is money we’re talking about.

If you’re in Corporate America, apparently you debate the issue for a few months. Then you convene the lawyers. Then you hire an outside law firm. Then you set a budget for the outside law firm for $10,000 a month. Then you meet with the lawyers ever week while they sort it out.

There are two things wrong with this situation.

First, you should debate very few things for “a few months”. This is definitely not one of them. If you’re losing $200,000 per month, you find someone to attack this immediately.

Second, this is not the time for budgeting. The budget is a choke point for solving this problem. Slowing it down and costing lost revenue in the process. Anyone that can do basic math should be able to comprehend that a budget is a bad idea for this situation.

So what is the actual cost going to be to pay the lawyers? Somewhere in the range $60,000-$100,000. Seriously. That’s it. Of course, spread out over 6-10 months…

Let’s do some quick math.

Assuming that if there wasn’t a budget, the problem would take 3 months to solve. Now layering in the budget, the problem will take 6-10 months.

This umm hypothetical company has thrown away anywhere from $600,000 - $1,400,000 in lost sales due to the way they set their budgeting.

That’s insanity at its finest.

For those of you reading that are still stuck in corporate America, working hard to get out.  Heed this advice.  The longer you spend your life learning from these drones, the more likely you are to become one yourself. 

If you haven’t read the initial Entrepreneur Vs Corporate Drones - Budgeting article, check it out now.

If you’re interested in learning more, checkout our resources at the B2C, B2B, and B2G pages.