January 19, 2021

Business Advice from Berkshire: Do you use your budget?

A budget is a plan for how much you intend to sell and how much it will cost you. Do you have one?

The majority of smaller businesses do not have a budget. They struggle to keep on top of history, let alone plan for the future. Are you one of those? Why would you want to spend time and effort creating a budget?

Clean-up Nicklins Blackberry 145If you go on a journey, you firstly decide where you want to go. You then decide which method of transport you will use to get there. You will then look at possible routes and costs and then, possibly, review your preferred method before making a decision and scheduling the trip. You should be doing the same for your route to greater profits.

Many business owners say they want to make more money without specifying how much they are aiming at, or what their route is to get there. It is because they are working good intentions rather than to a plan. This is where the budget comes in. The budget specifies how many sales and at what cost over a specific period. Having put the effort in to creating this, you can then monitor actual against budget to see how close to the plan you are. If you are exceeding your plan, it needs to be reviewed to see what you can do more of to ensure it is sustainable. If you are falling short of the plan, why and what can you do to improve the situation.

If you have never worked with a budget, and don’t know where to start, contact me and we can discuss what you need to do to create one. If you have one, but not using it, a quick hour of strategic review may be enough to get you back on track.

wconAsk around people you know who run a successful business, I bet you find they use a budget and would recommend you do too. Let me know your thoughts and why you would recommend drawing up a budget.

I can be contacted via info@wcon.co.uk or you can see some of the classes on offer on the web site www.wcon.co.uk.

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