Business owners often have a love hate relationship with budgeting. The Fortune 1000 would not think about joining the next fiscal year WITHOUT a budget, so why is it so hard for the smaller business to do this time honored process. Here are the three areas I see that cause owners to get stuck.
1. Forecasting. To make a budget realistic, you need to forecast revenue for the following year and spending. What will your city, state, internet/international world look like for your business during the next 12 months? Sometimes a local business environment may be great, but the state has problems or vise versa. What will your spending habits be? Money Magazine, Entrepreneur Magazine and Inc Magazine all have great articles in their December issues to get you thinking about what these experts think 2013 will bring. Remember, reviewing 2012 expenses for areas to trim or enhance.
2. Believing in the Plan. Part of a budget usually means we have a plan. A business plan that is driven by results will cause us to think about what resources will be needed to make the plan happen. Think of the plan as a map to getting where you want to be. A simple strategic plan will start with goals for your business that will be supported by the budgets.
3. Being Accountable. Becoming accountable sometimes is more than just saying “I’ll look at my business numbers weekly“. Often, we have to set appointments with someone else to see that this happens. If you are the sole owner of your company, you may want to find a trusted person or group to help you stay on target. This could be as simple as reviewing your plan with your accountant or coach. Maybe you want the minds of masters and a mastermind group is in your plans for 2013. Some owners are good at just scheduling a meeting with themselves – if that is you, schedule it now in your calendar for all of 2013. The template I use for my meetings is Monthly Plan Review and it is remembered in my Google/Outlook calendar and reminds me – simple and in my face! My meeting consists of filling in the blanks.
Making plans does take time, but often in the end the numbers will prove to you that it was worth the effort as the rewards of a planned business usually trounce the rewards of the unplanned.