5 Ways to boost your business budget
Sometimes, our annual budgets can seem like nothing more than wishful thinking. We want them to be well-rounded, and we want to be able to achieve everything we want to achieve. But how do we go about doing this? Follow our 5 tips to boost your business budget today to discover how you can take your budget beyond the spreadsheet.
Budgets Aren’t Always Realistic
It’s important to remember that budgets aren’t actually real. They’re just arbitrary, abstract means that we use to help us plan the future. Budgeting for greater revenue doesn’t mean that greater revenue will actually happen. Indeed, a budget has absolutely no influence on what will happen, neither in the market nor in your organisation.
The problem is that management tends to expect their process owners to take a budget and turn it into the actions that need to be taken in order to achieve the predicted results, and sometimes it doesn’t happen that way.
Make A Budget Actionable Rather Than Accurate
Budgets are often managed by finance, and for this reason we fall into the trap of believing that a budget should be accurate. But this is a misconception, and it can take you away from your business goals. A budget is instead an educated guess on what the outcome will be if everyone within the company does precisely what is expected from them. Except what is expected is usually not actually included in the budget!
To thus make your budget more actionable and to boost your business budget, don’t just budget the financial line item, put a bit more work into it and budget for the anticipated actions as well. For example, if you’re predicting a growth of 6%, you should detail how many customers are needed, as well as how much needs to be invested in advertising.
Identify The Drivers Of Financial Performance
We all know that financial performance is an outcome, therefore we can’t act on it. What we can act upon are the future financial results – or rather the things that will produce these. In this way, you can work more closely on marketing, sales, as well as the number of consumers that you need to engage with. Take a look also at how you can structure pricing better, as well as how your products can be improved. These are all known as performance drivers, which can be budgeted for and should be budgeted for.
Ignore The ‘Once A Year’ Mentality
Too many companies only measure performance drivers once a year, which can be counter-productive. Instead, boost your business budget – meaning you need to work more closely with the performance drivers all year round, so that you can make improvements and adjustments weekly – even daily. This will in turn make the organisation more proactive, productive and more effective. Eventually, it will make the yearly budget redundant and you will replace it with a perpetual budget.
One of the best ways to boost your business budget is to save on costs wherever possible. There are savings to be made in many areas, including your tax incentives and economic development, and by taking a closer look at areas you can save on costs, you will be giving your budget a timely boost.
Your business budget is important, and if you think yours is not going to help you achieve the growth revenue you want, our biggest piece of advice is that you look at overhauling your system of working. The business world is changing, with more and more businesses looking at ways to raise productivity whilst reducing waste, and by focusing on ways you can boost your business budget, your business will be more competitive.
If you’re needing help crunching numbers and figuring out a financial solution to boost your business budget, contact the geniuses at IQ Accountants Gold Coast on 5576 0011. We’ll figure out a resolution tailored just for you.