“Our budget is £___________.”
I cringe inside every time someone starts a conversation about their financial planning this way.
And all I can say back to them is:
“Is it really?”
Don’t get me wrong; I don’t think they’re lying.
I just think they’ve started at the wrong end of the process. And I don’t want you to make the same costly mistake, so…
Don’t start with a *number* when you sit down to plan your budget!
Starting with a final figure in mind, and then deciding how to divvy it up, is limiting at best; at its worst, it can be deeply damaging to your company’s development and growth.
It’s like deciding before you walk into a clothes shop that you are definitely going to spend £99 – no matter what’s in the shop and what’s already in your cupboard.
Ridiculous, right?
It would make a lot more sense to first figure out what clothes you actually need and like…. …And only then decide how much you’ll need to spend to get the right wardrobe, and the best places to spend it. You see, the number isn’t the right starting point for your budget – it’s what comes at the very end.
Here’s a better way to start – with the following question:
“What are our priority goals for this year and beyond, and how much money will it take to accomplish these?” (OK, technically it’s more like one question in two parts…)
Get clarity on what you want to achieve and what actions you need to take to get there. Then work out – backwards – how much money it will take and where it should be allocated.
When you do that, all the figures should add up to show you what kind of financial result to expect down the line
In other words, you’ll get the answer – the number you really want, your projected profit – but this time it will be based on real actions and solid figures, not on hopes and dreams.
Let’s say you want to grow by 20% next year. Where will that growth come from, and what will you do to generate it?
You might need to account for hiring two more salespeople in Q1, you might have to buy new equipment to process more sales or a new system to streamline your processes…
You can’t allocate even one penny to your budget without total clarity on all of this. And it’s only once you put these numbers down on paper that you’ll be able to work out whether all that investment will result in the 20% growth you want – or whether that was just pie-in-the-sky….
I admit, this questioning process takes a lot more time and thought than plucking numbers out of your head and calling that your budget. (Sorry!)
But that is the only way that financial planning – and business planning – actually works. It all starts with total clarity on your goals, and the actions that you need to take to accomplish them.
That’s exactly what you’ll get with our Just One Day business planning session. >>> Click here to find out more <<<
Right now, we are offering this incredibly intense, valuable planning process at half-price to businesses that qualify. But we only have time on our schedule to run a small handful of these sessions before the New Year. Apply now to see if you qualify for a half-price Just One Day session with us.
We’ll work with you to put together a high-level strategic plan for your company in 2020 and well beyond…. …So you can enter the new year, and indeed the new decade, not only with complete clarity about where you’re heading, because you’ve asked all the right questions and started in the right place…. …But also with complete clarity about how you’re going to action and fund your plan so it actually gets implemented, and gives you the growth you want.
Warm regards,
Garry
P.S. If 2019 fell short of expectations, our Just One Day process can put you on a new trajectory for 2020 and beyond…
If 2019 exceeded your expectations our Just One Day process can help ensure the momentum you’re building will be sustainable long into the 2020’s.
Space is limited, so apply today so you can ring in the New Year with crystal clarity and an action plan for meeting (or exceeding) your goals in the years to come.
