Every year, financial advisors sit down with the Board of Directors. A few laughs are shared, a few stories about the weekend’s events. Once the coffee has done the impossible and given life to the early risers, the conversation can be focused to one thing, budgets. For new companies this can be a daunting experience, the ever-present fear sits like a stone in the pit of the owner’s stomach. Did we make enough profit? Will I have to let someone go? Sometimes the numbers can be difficult to decipher and if you’re a business owner in your first year then these five tips will be helpful for you.
- Organization is a business’s best friend
When you sit down for that meeting, come into the room with confidence because you will have kept all your invoices, in a nice and neat folder. Most people underestimate the power of a neat and organized system. There have been numerous studies done outlining the pros to keeping an organized home, an organized work station, the same thing applies to our files. If we find a system that works for us when it comes to organizing the profits and the deficits, then implement it and watch as the stress melts away. I highly suggest organizing by month. When organizing by month, then the numbers can be translated into visual aids during your meeting.
- Graphs and Visual Aids
Now that you have everything organized in a system that works for you, take the information given and translate it into a graph. I highly recommend line graphs. It gives a cleaning look and in many cases, can be easier for the new generation of business owners to read. Line graphs can be found in numerous college classrooms and tend to be what the majority of up and coming business owners have familiarity with. Bar graphs are also helpful, but a circle graph won’t be as universally helpful, depending on the organizational system you chose to implement.
- Analyze the Data
Now that you have taken your data and put it into a visual representation, it will be easier to read for some and a pattern can be more easily discernable. This allows you to see where your company has been and given you an objective view of what is or is not working within your company. This look into the past will give you a road map, in a sense for the next year. That data you collected over the past year is giving you the key to success, all you have to do is pick it up and unlock the door to next year.
- Make a Plan
When building a budget for the next fiscal year it is important to keep in mind the fact that the numbers you come up with are projections. They are not set in stone. Look at those numbers as if they are goals that your company needs to reach. So, take the data you’ve gathered, look at the charts, and make a game plan. If you must, break it down by quarter and for some people breaking it down by month may be the key to success.
- Take Action
You’ve gathered your data, you’ve analyzed it, and you’ve set up projections for the following year. You’ve built a road map for your company for the next fiscal year. The most important step of all, implanting it. Follow your road map, try to reach those goals and be willing to be flexible.
Remember that this is your company, success is within your grasp if you follow a plan that works for you. Declutter, gathered the data, analyze it, plan, and then get started. Sometimes building that budget can be a difficult and frustrating endeavor. At the end of the day, it is still your company, so find the best way to be successful is to follow the steps that work for you and your business model.
Written By Devin Hill