Budgets and Forecasts

Following on from my last blog which was on planning this one talks about budgets and forecasting.

So, you have a great strategic plan, you have goals and targets, but can you turn this into a viable business proposition? Will it make a profit? And even if it will, when will the money hit the bank?

We know that not everyone “gets” accounts! But they’re the way of recording the financial impact of what’s going on in the business; they measure the results of what actually happens.

Putting the two together, a budget is the financial version of a plan. It’s a prediction of what you think the numbers will be as a result of how you expect the business to operate. For example: if you’re going to introduce a new line of sales, what impact do you think it will have? What income will it bring in? What will it cost you to bring it to market? Will you have to employ more people to bring it to market? Will you need to pay more overheads? Read More »

Business Planning

There’s a quote that says “Failing to Plan, is planning to Fail.” (Alan Lakein, adapted from a saying from Winston Churchill).

That sounds a bit drastic, I’m sure nobody plans to fail but there’s an element of truth in it. Every business does need to continue to grow, adapt and develop, even just to stand still. Otherwise it will stagnate and lose ground in the market place.

You have to have goals to be able to plan forward. So the first step in any plan is working out what your goals are (both for the business and the business owners). We know that not everyone wants their business to grow into a huge multi-national corporation, or even to become a business that a multi-national corporation would want to buy. But what do you want from your business? It may be to have an amount of money in the bank; it may be a certain lifestyle. It may be to be able to work doing something you love, in the hours you want to spend in it, and earning enough to have a comfortable lifestyle. And the money, time and energy to do the other things in your life you enjoy.
(The kiwi goals of bach, boat and bmw). Read More »