Create Your Budget Blueprint
It’s September 1st and once again you didn’t sleep until your alarm sounded. Typical. Why do you have an alarm anyway? You pour a cup of coffee and let the dog out to do its business. You breathe in the crisp morning air and thank the awakening sky that the day you’ve been waiting for has finally arrived. It’s Budget Day!
…the day you’ve been waiting for has finally arrived. it’s budget day!
Budget Day marks the first day of your formal annual budgeting process. At a minimum, this is a 30-day process but I advise making it a 3-month process of information gathering, goal setting, strategy meetings, reviewing reports, and tea leaf predictions. Gather your team because all key players should be in on this process in one form or another.
Give your money a job to do
I like to start the budget process with a statement. For example: “By December 31st, I will have $300,000 (or 12%) EBIT so I can replace 1 van, repair the roof on the shop, and afford better health insurance for our employees”. Then, work backward to your starting point and start breaking down how you are going to make this happen. Based on each department’s profit margins, where will the revenue come from? What does this mean per month? Per day? Per opportunity?
The budget process works best once it’s engrained in the organization. To get started, it may be very useful and helpful to hire a consultant or a coach to work with you to develop your process. Are you worried about the cost of a coach or a consultant? Well, you wouldn’t be if you had budgeted for the investment. Also, it just so happens that I offer a Budgeting Blueprint Workshop if you are interested.