Set a realistic budget…

A budget is so important in a business … have you taken the time to create one?

Do you want to reduce your risk and remove some of the surprises that can occur?

Then create a budget!

Remember: Your budget needs to be realistic – not just a percentage increase on last year.

Operating Budget – Revenue

Start by:

  • Assessing each line critically
  • Mapping your revenue to see where, how and when the money is coming in to create a reliable estimate of your income for the coming year.

Look at what is required to generate that income. For example, what advertising, marketing and resources will be required?

Operating Budget – Expenses

  • Be tough, but realistic on costs.
  • Don’t forget to allow for growth and the increases that are likely to flow through

Once complete, do a couple of alternative estimates for your key revenue drivers so you understand the impact of changes to your assumptions.

Important tips:

  • Track and measure it throughout the year
  • Involve your management team to get buy in and responsibility for achieving the budget numbers they give you
Having a budget in place that you need to report on regularly makes you focus on what really needs to be done.