Projecting your budget as your business continues to grow
One of the toughest things about managing a growing business is having solid financial plans in place. Growth can be unpredictable, especially with an organisation that's new and still finding itself – but the truth is you need to predict it. Success in business is contingent upon hitting your numbers. This means knowing how much income you expect to take in and how you plan to allocate those funds when you spend them.
Your goal is to look over the data, make predictions for the future and pencil in a financial plan.
With a business that's well established and set in its ways, this is easy. It's a lot tougher with an organisation that's still growing. Your goal is to look over the data, make predictions for the future and pencil in a financial plan that makes sense. But how will you do that when your numbers are always changing? It won't be easy.
What you need to draw up a budget
Having a clear budget is an essential part of business development. According to the Department of Industry, Innovation and Science, you need to figure out a few elements before you can write one:
- Time frame: How will you measure your business' financial success – from year to year, month to month or another way?
- Costs: These should include both fixed costs (rent, insurance) and variable costs (wages, materials, other expenses) that vary with the level of output.
- Income: How much money do you expect to make? If you have sales targets for each period and strive to consistently hit them, it's easier to stay on track.
The goal is to develop a sustainable plan so that your income levels can get you to break even with every budget cycle.
Making difficult future projections
It's not always easy to make projections about the future. MYOB.com suggests that to make this happen, you use a strategy that combines examining your financial history with predicting your future trends. How much money have you made in the past, and how will future developments (a larger staff, increased sales) change the status quo?
The best you can do is make educated guesses about these things. But if you decide you need a little extra help making projections, that's perfectly fine – at Wilson Porter, we have the expertise in house to give you a hand. Our staff of chartered accountants is more than up to the challenge.
In addition to budgets and projections, our business development consultant team can help with many other aspects of running your organisation, including coming up with KPIs for measuring success and acting upon the results you measure. Turn to us for any sort of assistance you need with growing your business.