At the start of each year, you probably make goals and have dreams of where you would like your business to go and visions of how it will grow. You prepared what you thought to be a realistic budget. Preparing the budget is the first step.
Reviewing it at least monthly is just as important to the success of your company. Don’t let your budget gather dust and forget to look at it ever again.
If you haven’t prepared a budget for the year yet or haven’t been reviewing your budget monthly, it is not too late! Do it now. Preparing a budget is one of the easiest and most beneficial things you can do for your business. Our customers see now what the results of their decisions will be in the future. Often, the first draft of the budget shows an unwanted financial result. Without a budget, you wouldn’t find this out until the money is spent. With a budget, you have a chance to proactively adjust your plans. Then the budget allows you to compare your projections to your actual performance.
Are you on track? Here are some tips:
- If you haven’t already, create a budget based on last year’s actual numbers.
- Schedule your budget review on your calendar monthly and follow through.
- Have a review buddy to keep you accountable. Meet within the first 10 days of the month.
- Create a task list to meet your goals and assign the task to a specific person.
- Each month, create more tasks to help you reach your goals.
- If needed, adjust the remaining month’s budget after updating.
A common is projecting low expenses and unrealistically high revenues. With proper planning and research, your goals can be accomplished. Here are 5 questions to ask yourself when approaching a budget review:
- Are you meeting your sales goals? If not, how will you address the situation?
- Add new products?
- Eliminate unprofitable products that may be zapping your time?
- Are you pricing your product correctly?
- Is your marketing/sales plan being followed?
- What is the potential revenue from the changes you are making?
- Are there new/unexpected events to consider? If so, what expenses and potential income are involved?
- Ads?
- Registration costs?
- Will travel be involved?
- What is the potential revenue?
- What personnel growth is needed? What is the actual cost?
- Will it be part-time, full-time, or both?
- Are benefits involved?
- Is an outside payroll and/or company needed?
- If new personnel, there are more things to consider as well:
- Will additional equipment be needed?
- How much time will training take? What will the training cost?
- Are more supplies needed?
- Is there enough office space?
- Is a new workstation or an additional desk needed?
- Is your rent scheduled for an increase?
- When? How much?
- If you pay for utilities, have you factored in any rate increases?
- Can your utilities be put on a budget with the electric or gas company? If so, are you on it?
As you answer these questions, you will fine tune your budget and increase your chances of success. There is a direct correlation between companies who keep an eye on their progress. With a budget and review process in place, you will dramatically increase your chances of reaching your goals.
Confused about where to start with a Budget or want someone to do it for you? BudgetEase can help. Give us a call at 216-333-1303.
