Your Business Roadmap: Do you have a plan in place?

As the old adage goes, “failure to plan is planning to fail”. I’ve seen it in businesses of all sizes in a variety of sectors.

Building a budget often ends up at the bottom of the priority list.

In my experience, business owners have the best of intentions. They work grueling hours. Their minds are always consumed by their ventures. They want to build a thriving business, not only for themselves, but also for their employees. However, the day-to-day, urgent activities fill up the calendar, squeezing out highly important, but less glamorous business needs such as developing a budget. Managing the finances becomes nothing more than a gut feeling and a quick check of the cash-on-hand. Not having a plan positions owners for reactive, rather than proactive management – a great way to throw money out the window!

Become enlightened and establish your North Star

A budget is the first step in actively managing the financial health of a company and establishing reasonable goals for the budget period. The first budget exercise is often the most enlightening and difficult. It is a worthwhile, but time-consuming undertaking. Determining the most basic inputs (revenues) and outputs (expenses) can shed considerable light on the operations and help management assess where money should and should not be spent.

Your budget will help you take control and create capital 

A budget helps identify the capital structure of the business. How operations and growth is being funded can have a significant impact on profitability and cash-flow. The budgeting process can also be an opportunity to evaluate vendor contracts and product pricing structures.

Budgeting is the first step in taking control of your business. Once a clear process and plan is in place, effort can be directed towards proactively managing cash flow, controlling expenses and driving the bottom line.

It’s difficult to navigate without a good roadmap, but we're here to help. We have years of experience helping businesses build a budget and evaluate business results.  We use advanced tools and techniques to frame your budget, and provide enablers for you to take back to your team to establish action plans and shared ownership of the budget. 

Post by Jessica McMeans, jessica@columbusaccountants.com