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
- 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.
- 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