There is a fresh feeling in the air that rolls in with the month of September: a new academic year commences, and the crispness of autumn hovers on the horizon. In the business and financial world, September represents the final lap – the homestretch, if you will. It’s time to assess your business’s performance over the past year, and to begin preparing your budget for the year ahead.
The budget is a key component of your business’s success. As the operational and financial roadmap for your strategic plan, it deserves a generous amount of thought and precision to both prepare and review it. See our tips below on making the most of budget season.
I. FINISH OFF STRONG:
Prior to forecasting for the upcoming year, it’s crucial to understand how you’ve fared during the current year, and to finish off strong. Where are you at right now financially, and how did you perform against your projections? How much closer are you to your ultimate destination? Did you take any wrong turns?
If your business hasn’t been delivering as well as you’d hoped, fear not: there are three months remaining, and it’s not too late to hit your targets before the year draws to a close. In fact, September’s aura of reawakening and opportunity applies to business owners as much as it does to students returning to school. Working under pressure during these next few months might be just the push your business needs to steer itself in the right direction and end the year on a high note.
II. UNDERSTAND THE STORY BEHIND THE NUMBERS:
When it comes to planning for the year ahead, ask yourself how you can use the information gained from this year’s performance to help you in the upcoming year. It’s time to review the financial statements, yes, but it’s also time to really decipher what the numbers on those statements mean in terms of how your company is performing against your vision. The numbers only hold meaning when there is a budget to which they can be compared, or industry data against which they can be bench-marked.
Do you need to make any adjustments, or “re-route” to get closer to your destination? Measuring your financial statements against your budget will enable you to craft a realistic budget for the coming year.
III. MAKE BUDGET REVIEW A HABIT:
A static budget, revisited annually, probably isn’t going to reap benefits for your business. There are too many factors, both internal and external, that are constantly changing and influencing your numbers. Therefore, a successful budgeting process involves a monthly review of reports comparing your budget to your actuals. This habit will enable you to continuously reforecast your budget to reflect real-time changes and behaviors of every aspect that has an influence on your business, allowing you to quickly change lanes if needed before it’s too late.
Let BluePrint Strategy be your partner in Financial Strategy and Business Performance. We'll help steer your business in the right direction through Financial Analysis, Strategic Planning, Revenue Projections, and Budgeting/Forecasting. Contact us today for a consultation.