How small business owners can use ‘loud budgeting’ to build trust

Earlier this year, loud budgeting exploded as a trend in personal finance circles, but its principles can also be valuable for small business owners looking for less financial stress and more financial freedom. Here’s how loud budgeting can help you share your goals, constraints, and performance more openly—either with your team, your customers, or both.

What is loud budgeting?

Loud budgeting as a concept began with a tongue-in-cheek TikTok by comedian Lukas Battle, but soon gained traction among influencers as a serious personal finance strategy. Loud budgeting involves openly discussing your financial goals and decisions, especially those based on your limits.

For example, you might decline a dinner invite just to save money on eating out, or opt for a staycation instead of a destination trip just to save on travel expenses. The aim of loud budgeting is to remove the stigma around speaking about finances, practice guilt-free frugality, increase financial freedom through savings.

How does loud budgeting apply to small business finance?

While businesses are less likely to conceal when something isn’t within budget, the radical transparency of loud budgeting can still be a benefit. As expenses like rent, equipment, and shipping increase, some owners want to be open about changes in their financial situation, either to their team, customers, or both. 

3 loud budgeting strategies for small businesses

Below are three ways your business can use loud budgeting—whether your goal is to set clear spending limits, gain employee trust through transparency, or build customer loyalty.

• Loud budgeting for yourself: Set clear revenue goals and business spending limits for yourself. Share these with a business partner or friend outside of your business.
• Loud budgeting within your company: Be transparent with your employees and stakeholders about company budget and financial limits.
• Loud budgeting to customers: Be transparent with your customers when you make product decisions for financial reasons. You can also position these changes to align your products and brand.

Benefits of budget transparency for small businesses

Transparency means accountability

By sharing with friends, employees, or customers, you create an external penalty for missing your budgeting goals. This penalty may only be reputational, but it can motivate you to reduce wasteful spending and ensure you’re using funds efficiently.

Develop saving habits

Regardless of how you choose to practice loud budgeting, it will require you to rethink your financial habits. Over time, you can decide which of these habits are beneficial to your business, so even if you decide loud budgeting isn’t for you, you can continue to apply your new financial health mindset or company culture.

Improve communication between teams

Sharing financial information with your employees can help to align the interests and perspectives of different teams. It may be easier for parts of the company who don’t normally see that information to spot new growth opportunities or to measure the feasibility of plans.

Tips to make loud budgeting work for your business

Stay flexible

Creating a company culture that’s too focused on saving can increase rigidity. While loud budgeting empowers you to reframe certain avoidances as steps toward long-term goals, try not to pass up major growth opportunities. Remember that some opportunities can’t be predicted when you’re hashing out your budget goals, so leave aside some funds to take advantage of them.

Consider who you’re sharing with and how much

Not all of your employees want to know the details of the company’s finances. Sharing too much information with them, or sharing too often, can be confusing and distracting. In addition, consider how you frame your budgeting goals to employees, stakeholders, and customers—otherwise they may misinterpret certain signals.

Establish security protocols for sharing sensitive information

Making your company finances too accessible to employees can increase the risk of security leaks or hacks to your business banking credentials or employee financial information. When loud budgeting, share your objectives, obstacles, and the reasoning behind certain decisions. Train your employees on how to handle sensitive company information and avoid scams.

Keep a long-term perspective

Loud budgeting is about avoiding financial stress and enjoying more freedom. If you, your stakeholders, or your employees follow the company finances too closely, your focus will be directed away from work and toward the numbers, which will create unnecessary anxiety around each inconsequential shift. Maintain a sustainability mindset, and contextualize each spending decision within your overall goals.