How to fund small projects as a CEO

One unexpected result of becoming CEO of my own company is that I found myself without a traditional budget line I could pull from.

As we grew our company, we created a budget aligned with core functions. I stepped into a role in which I was overseeing them all, but I didn’t set aside budget for me in last year’s budget for myself. That sparked me to wonder how other CEOs approached giving themselves budgetary space to experiment, explore and trial.

I did have a line item for travel and business-related meals but I was coming across projects and having to navigate internal budgets. I asked several CEOs I know for their own approach.

All the CEOs I spoke to had some version of a discretionary line item that went beyond more practical measures (like for travel and meals). Most worked with a chief of staff, operations lead or other assistant to manage and plan that budget. Many used their budget for experiments or non-recurring trials, like marketing, consultants or bonuses.

A couple I heard from based their line items on percentages of overall expenses so it grows proportionally to cost basis. For example, one said he keeps it between two and three percent of overall expenses.

Several essentially saw it as part of profit planning, noting they planned quarterly and would push it to the bottom line if unnecessary. One specifically shared that he won’t carry over if he doesn’t use his monthly allowance but will borrow from future months.

The point: understand what you as CEO need to invest in and create a plan to do so.

(Laptop photo via Unsplash by rawpixel)