Annual budgeting is exciting! A budget isn’t supposed to make you feel trapped or limited. A budget done well frees your mind and helps quantify the key priorities for success. A budget is simply “pre-planning” the revenue you want and how you’ll spend it. Looking at it that way, it’s not restrictive at all! In fact, it’s quite the opposite. Your budget is also a goal post.
As we approach Mid- to late January, hopefully, you are putting the finishing touches on your annual budget for 2015. You’ve held meetings where tough and challenging questions have been asked. Then, out of those questions, the opportunities you want to tackle over the next 12 months have emerged. Last, you’ve quantified those opportunities into a meaningful monthly roadmap. Remember though, that once the budget is done, the process isn’t over! Don’t let your budget collect dust. Below are several great strategies for what to do next.
Form a Committee. Getting others involved is the cornerstone of building a valued business. Not everything has to be shared. Share what you can be comfortable with. For example, your marketing budget, or office expenses budget.
Track and Review. Just tracking and regularly reviewing your numbers will make them improve. Why? …Because you’ll stay focused on your priorities and make better decisions. Make a plan to review your Budget vs Actual Results monthly- and honor it! For example, block off time on the 2nd Thursday of each month from 3:30-4:00 pm, even if it’s just you. During that time, review the top 3 to 5 numbers you want to watch, and not just revenue, receivables, and payables.
Delegate. Create an opportunity by picking some key line items in your budget for someone else on your team to track and review. Office expenses and Marketing expenses are a great example. Give them the power to review those costs regularly, and bring suggestions or changes to you for approval.
Manage Yourself. If you’re the type that might spend quickly, use your budget review process for “appropriations approval.” Don’t spend more than is in the budget, or more than a specified amount, without acknowledgment and support. Your Bookkeeper is great for this!
Make a Plan B, Plan C, etc. If revenue is less than projected, what will happen? For example, prioritize your spending ahead of time- what would you cut? What marketing programs might you hold off on? Alternatively, if revenue is more than projected, what might happen?
Get Back on the Horse. As they say, even the best-laid plans fall short. Anticipate missing some meetings, losing focus, or even having to completely redo the budget. Don’t be sidetracked by missing perfection…stay focused on being committed. Today is a great day to start again!
Goals make work meaningful. They give us something to strive for and achieve. If you set goals that are worthy to hang your hat on. achievement is its own reward!
A great budget can make clear the (financial) path to achieving them. In that light, hopefully reviewing your budget becomes more than just looking at numbers. By following the steps above, you’ll give yourself and your team a great opportunity for success.
What are your goals this year? You can let us know below or in our LinkedIn Group: Guiding Small Businesses to New Heights
All the best-