Getting Started Good Business

What's Your Budget: How to Answer The Forbidden Question

Monday, August 14, 2017Ava Bella

If you are in business of any kind, I’m sure that you have heard or had to ask what some call ‘the forbidden question’: What is your budget?

This post comes directly from a friend of mine and serial entrepreneur, who is launching a new business. She told me about a time she was working with a few vendors and asked if the question is appropriate. After chatting and giving my perspective on the budget question, she suggested that I write a blog post about it. The truth is that a lot of entrepreneurs find the question offensive when they shouldn’t.

Answering the question is essentially a part of the buying process; it is a part of business. You will be asked millions of times and you should answer honestly.

📷 : Olu Etu
I first started being asked this question when I was getting started as an artist or MUSICpreneur as I like to call it. I was speaking with music producers, printers, engineers, photographers, designers, and other vendors and even my own team. I was repeatedly asked the question. At the time, I honestly didn’t know. I had no clue what the going rate for recording and promoting a new project was; so I had to learn. I knew that I had roughly $8000 to spend for everything: studio time, mix and master, promotion, radio commercials, in-store events, sound engineering for the CD release show, the venue for the CD release, graphic design, photo shoot for the album cover, digital distribution, travel and lodging for the promotional tour, and wardrobe. See what I mean? I knew everything I had to get done, but I had I created an allocated amount for each category or item? Then, once I started Assilem Media Group, I began working with prospective vendors for client projects. I had to communicate to vendors who would ask me about budgets; the answers that I have gotten to this question have been all over the spectrum from reasonable to outrageous, to say the least. Sometimes, my client was upfront and told me I want to spend X amount for service XYZ. Other times, they would ask, can you find me a cheap ABC to do XYZ. My follow up was always what do you define as cheap. Then a whole other conversation would ensue about paying service providers adequately and according to the Scope of Services…bu, that is whole other article.

As you can see, there are a few different ways that businesses typically answer budget questions:
The majority of business owners or decision makers say they don’t reveal their budget, some say they don’t know what their budget is and they will just cover it once they receive bids or proposals, others say they have allocated a minimum or maximum they want to spend (very few), and others say that they will just cover it with the current overall budget they have in total for the project.

Do any of these sound familiar?

Be Assertive. Answer the question.

Here are a few reasons why you should answer the question:
  • It proves this is not your first rodeo: Knowing what your minimum and maximum is that you’re willing to spend is a great way to demonstrate experience and that you won’t be swindled. It essentially places you in the driver’s seat!
  • It proves you’re serious: Most people who aren’t planning to spend, or who plan to be dishonest, are the ones that don’t know their budget. Now the flipside of this is maybe you are just doing research to find out what the going rate is for a service; be honest with them, they will be honest with you, too. You will find your research will lend to future endeavors and projects.
  • It proves you can be trusted: When you don’t answer the vendor question, it comes across that you’re hiding something and you are altering the foundation of trust in which you need to move forward in a mutually beneficial business relationship. As frustrated as you feel when being asked this question, they feel just as frustrated when you A) don’t answer or B) respond with a counter question. Again, this keeps you at the helm of the business interaction, forms a foundation of trust, and keeps things on the path to flowing seamlessly.
  • It weeds out the nonsense:  If budget and deliverables are out of sync; don’t you want to know sooner than later? Say you have done your research and you know a service or job is $200 and they tell you, “awe just give me 25 bucks”, realistically, wouldn’t you just thank them for their time and move that vendor to the novice pile (Side note: this definitely depends on the type of service or deliverable, maybe what you want only costs $25, but you get what I’m saying) – the flipside is you know a service is $100, but the vendor wants $2500 – use your best judgement when these instances arise)?
  • It proves you are the professional: When you have done all your research and you know the minimum and maximum that is normally charged for a service, then you go into vendor interviews with this knowledge, you can communicate as such, and everyone can decide whether a business relationship will be beneficial. Stay at the helm, by showing you know what is what!
As you move about in the business realm, you are going to be to be asked about your budget. Don’t take offense. Do your research. Be transparent about your projects overall needs and goals. Establish yourself as the driver by effectively communicating. Be professional. How you handle the inner workings of your business becomes your calling card and proceeds you just as much as your client relations practices. Now go out and be awesome!

Have a project you’d like to chat about?

Call us today: 323.484.3751; Email us: contact@AssilemMedia.com; Visit my contact page here on the blog to see current and previous clients, my media kit, and the wide array of services my company Assilem Media Group, LLC provides.

Until next time,

AvaB

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