November 9, 2018.
In This Series of Ten Tips Between Now and the Launch of the Mastermind Program you’ll get Coaching, Advice and Practical Recommendations on what You Can do to Improve Your Business Results Starting Today.
Tip number 2: “Evaluate the performance of your business this year and Finalize your Budget for 2019.”
Business Owners, CEOs and Leadership Teams are sometimes reluctant to undertake a thorough Year-End review or ensure their next year’s budget is finalized by year-end. There’s no other way to describe this approach – “it’s a bad and possibly even fatal mistake.”
Here are some compelling reasons why both the Year-end Review and Budgeting Process are so important:
1. The Year-End review allows you to make objective and more accurate conclusions about how the business has performed in key areas, including:
• Hitting Sales and Revenue targets. More importantly, if you exceeded or fell short – Why and what should you do differently next year?
• If margins were substantially above or below your budget or targets – Why and was your pricing to clients correct?
• Were expenses in-line with budget and the prior year or way off?
2. An in-depth and objective Year-End Review with your key staff keeps them informed, accountable and creates a sense of ownership and involvement in the New Year’s budget.
• It’s an opportunity to review expenses in detail and look at areas where they were well managed or improvement is required.
• Staff productivity, using KPI’s such as Wage/Revenue productivity or Revenue per employee can be evaluated objectively and targets set for the New Year.
3. Using this Year’s latest numbers as a basis for Next Year’s budget will ensure your budget for the New Year even though challenging will be realistic and achievable.
There’s a long list of reasons why a business needs a comprehensive, detailed budget, but here are just two, which make the case that a budget is not an option, it’s a necessity:
• It requires agreement on the company’s Key Goals and Objectives and that these be formalized in a budget. This sets out the company’s financial commitments and targets for the coming year.
• It provides a detailed road-map based on sales, revenues, expenses and profit of how goals are going to be achieved.
• The key stakeholders are forced to consider and factor in industry, competitive and other factors, such as ‘greater than anticipated’ business growth or ‘loss of key accounts’
Creating a budget with staff involvement, results in their sharing the organisation’s vision. If well communicated the budget helps everyone understand the priorities of the business.
Finally, and as only Zig could put it:
“IF YOU AIM AT NOTHING, YOU WILL HIT IT EVERY TIME.” – ZIG ZIGLER
Canadian and International Businesses Click here
President and Founder
Professional Business Coach
BizGrowth Coaching Inc.
Phil was Google’s Business Coach for the Partner Academy Program for Canada and the US from April 2015, until its conclusion this Summer. He coached 65 Digital Partner Agencies and continues to work with Owners and CEOs today.