Help with Budgeting

You have had a year into the business and its time to analyse the good and bad and plan for the year ahead. This is a guide to help plan your budget for the upcoming year.

Budgets and Plans:

You have had a year into the business and its time to analyse the good and bad and plan for the year ahead. This is a guide to help plan your budget for the upcoming year.

Take your original budget and the years’ accounts to date, then analyse and answer the following questions:

1. What areas have gone better than expected this year and why?
2. What areas have been disappointing this year and why?
3. With the benefit of hindsight, what would you have changed in the budget?

Now that these factors have been analysed, the next step is to discuss and think with relevant people for relevant views that will help to plan for the coming business year.

Firstly, Talk with people that matter, these are generally people who you have dealt business with in the past year and will have an informed view of the business process. People such as:

1.       Your suppliers

2.       Your manufacturers

3.       Your customers

4.       Your own team

5.       Your bank manager who can discuss the financial dealings of the business so far.

6.       Managers of other organisations and competitors (if this is possible.)

These people will have opinions on how the business transactions went and what they see as good or bad business dealings. It will be worth asking them of their views on the next business year, the problems and opportunities they faced, consequently, what strategies may be implemented to deal with these findings. The answers may be vague, useless and a waste of time but out of all of these groups of people, there will be a voice that matters. It is best to analyse with a vast range of people to input more thoughts and more solutions.

Next, Think about what restricts your business and why.

These may be internal factors such as marketing budget, storage and display, financial gearing or staff resource and equipment. They may also be external such as market size, competitor action or government policies. If these factors can be identified then the solutions can be placed in for the next year to minimise its affect. For example, if staff holidays have affected productivity then plan ahead a staff rota that caters for the future staff absents. The more you know, the better you can plan ahead.

Thirdly, Quantify the assets. Decide what needs to be taken out of the budget and what needs to be added in, Whether it is people, equipment or money, you need to quantify them and set it out in the budget. This way, it is clear where everything that is needed is and how much of it is in the business.

Lastly, Prepare these stages. This guide requires time to achieve with the accounts and interviewing people and budgeting itself. It will be worthwhile planning when to do each stage and how.

This guide is to help with budgets and plans of a business. Remember budgets are not just numbers and tables but they are also narrative and explanations.