Budget is Accounting and Finance’s version of a four letter word.
There is no such thing as an accurate budget, but a good budget is a great tool. Dwight D. Eisenhower, Commander in Chief (President) during World War II said “In preparing for battle, I have always found that plans are useless but planning is indispensable.”
Who would think to build a 30 story building without a detailed set of plans? Why not? It is because a project of that size and magnitude requires a plan of action to keep all parts and parties moving in the right direction. Is the next year of your business life any less important to you? It makes sense for a building builder to have detailed plans; how can it make less sense for you, a business builder?
I am an advocate of preparing and then managing to a budget; I think it has far greater value than the obvious financial tool. Preparing an annual budget serves as a mental catalyst to preparing an annual business plan.
Example 1 – do you want to grow sales volume; if so, how much? And how will you accomplish the growth?
Example 2 – if you are starting a new marketing and sales initiative next year, budget time is the time to start planning.
Example 3 – if you are thinking of adding staff or square footage next year, the budget process ignites that planning.
Everyone I know, including accountants, experiences some level of dread when thinking of the next budgeting cycle. Those however, who embrace the process of annual planning rest much better knowing that when detours hit next year, they at least have a plan of action that can be revised. They are not taking turns in the dark and hoping for the best outcome.
The best budgets are inaccurate, but the any planning eclipses no planning. Call today to set up a complimentary, no obligation coaching session, and let us prove the value of the planning process!