Growth Budget as a Service
This week I had a nice problem to solve.
Some of you know that I took an Intrapreneur job about a year ago i.e. I’m building a new venture from scratch inside a big corporate.
Yes, such funky jobs do actually exists.
When COVID vaccines have been announced, about 3 weeks ago, I took a chance on a tactical pivot. I won’t elaborate on the details as the business is in stealth mode, but I’m happy to report that 3 weeks on, and with a MVP almost good enough to sell now, I face big, fat, hefty traction.
There’s just one silly problem with Corporate Venture / Intrapreneurial models. I can’t raise money on the spot to fund this growth surge. I need to wait for the … budget cycle.
Yes, even with profitable sales at hand, I can’t do these sales unless I had in my budget a provision to support the operating cost ... that these unplanned sales will trigger.
You read it well.
I'm not allowed to close these sales, because despite the fact that these new revenues will outweight these new costs and will result in an increase of the bank balance, I had no provision to spend these costs in the first instance..
If that looks silly to you, that’s how 99% of traditional big corporate do budgeting.
I have a couple of workarounds this, like triggering a re-balancing of budget from other departments who are below their spend budget, maybe an informal agreement with the CFO to get paid from my customer at 30 days and pay my suppliers at 60 days so I’m over budget but de facto don’t generate any unplanned cash out, or …
… or there should be a FTSE100 specialised lender for this kind of situations that must happen often. What about an Unexpected-Growth-Budget-as-a-Service for large and reputable corporate with AAA ratings?
Ok, Ok UGBaaS doesn’t sound pretty. But that’s a new business idea to investigate if anyone fancy this one. Let me know and I’ll peer you up with one of our mighty advisors
K̶e̶e̶p̶ ̶t̶h̶i̶n̶k̶i̶n̶g̶, Start doing.