“You can’t change what you don’t measure”
 
If you’re like many entrepreneurs and business owners I talk to, you probably ask yourself, “What’s all this fuss about a budget? I know what’s going on with my business.”
 
That may be true now, but what about your plan for this year? Do you know the profit potential of your sales goals? How much cash is required?
 

A good budget process answers these questions and more.
 
Bottom line – a budget is vital for your company’s success.
 
A Budget Quantifies Business Goals. A budget isn’t a crystal ball; it consolidates and quantifies your plans, showing their financial impact before you act.
 
Review your strategic plan and the tactical items for this year. Quantify your goals – list them, calculate the revenue they’ll generate, estimate associated costs, and add them to your current business base.
 
Break these goals into smaller departmental budgets to share with your team. This ensures everyone contributes toward the overall goal, while you motivate and ensure accountability.
 
A Budget Serves as a Roadmap. Think of a budget like a GPS, guiding you from Point A to Point B. It embeds your annual business goals in detail. Discipline is required to achieve these goals fully.
 
You can’t foresee all risks and opportunities, but a budget provides a platform to evaluate future events. What good is a roadmap if distances aren’t indicated?
 
Regularly assess your progress toward your goal. Measurement against the budget is the ultimate test of discipline.
 
Need help with your budget process? Contact TurboExecs.
 
Follow along next week as I discuss how budgeting enhances decision-making and mitigates risk.