If you haven’t read it yet, click here for PART ONE.

Next up: Tips for setting a yearly revenue forecast and business budget. As business leaders, we must consider more than just our personal budgets. Business budgeting is another level and style of numbers crunching but also essential to your organization’s success. Here are some steps to help you master the art of budgeting for your business.

  • Look at the actuals. Yes, 2020 was an anomaly, but there are surely insights to be gained from looking at your actual budget numbers from the previous period. In this case, it might be wise to review 2019 as a comparison – for a “normal” snapshot of your expenditures. 
  • Project into the future. As we forecast we create a clear roadmap of our revenue goals. We set our baseline goals and add in stretch goals of how much we hope to sell, how many clients we plan to acquire and where we want to be in the following months, quarters and year. Of course, we factor in our costs and expenditures that support those goals to create a complete picture of how to get there. This exercise leaves us with a clear view of how we reach our net profit goals. This will leave us with the net profit.  

A few key points to fold into your budget planning session:

  • Plan ahead for tax, fees and loan repayments that may be coming due. It’s a common misstep to leave these costs out of the budget picture and then find an unwanted surprise at the end of the period. 
  • Plan ahead for needed investments. If you are planning for growth, what investments will you need to support that? Of course, planning for an investment might require plans for savings, but it could also include painting the right financial portrait so your business qualifies for financing when it needs it.
  • Enlist the services and support of the pros. Budgeting can be hard, especially if you go it alone. At Agile Planners, this is what we do. Our expertise can help you streamline the budgeting process and, most likely, help you consider things that weren’t even on your radar. We’ll partner with your business to help create the road map to success you need – from budgeting to your books and beyond.

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