It's Time to Start a Budget
If you own a Small Business, it's time to start thinking of plans for 2010.
Budgeting is the first thing that comes to my mind as you formulate what goals you have set for sales, how you might reduce costs, and if you need to add employees.
No company should run without a solid budget in place. This is probably only the case in 40% of the companies, so I would like remind anyone who is reading that this is one area that will help you achieve what is possible.
It is a benchmark that everything should be measured against throughtout the year.
Just creating the budget is an excercise in understanding your company better. Running a Profit and Loss each quarter with actual vs budget figures is a great way to see where you are achieving your goals and where deficiencies lie.
I will be working on several budgets this next month for some of our clients, and I hope you will take this opportunity to start working on yours. I will be making some observations as I go through this process and noting them back here, to let you know what kinds of things this activity can help with.
Terry
I've finished my first client's budget of the year and can say it was a great experience. We started with a one to one conference where we discussed the former year. What was good, what needed to improve. Plans for the following year came next, including reviews of their current spending habits and employee needs.
Next I created a budget using all the information at hand and including the assumptions we discussed in our meeting. Last, we had a final meeting to review each line item and changed some to better suit the owners judgements.
We are both feeling great about his company. It has become very organized financially in the last year, and this is their first budget they ever had. A lot of sincere communication was given to make sure it was a reach for sales, but still attainable, and that expenses came in line with that additional increase. I think it was an eye opener for management to look at each line and really plan in advance, not react after the fact.
They are very happy to have this budget in place. I am happy to have a benchmark we can judge the quarters by. I urge you all to get out your pencil, calculator and work towards this goal. If you need help with this process, you know where to find me!
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