If you only do ONE thing before 1 July do this:

BUDGET!

Budgeting is absolutely the best way to improve your business profits and overall business value next year (and the year after, and after that too).

There is a little known trick to budgeting, and it has nothing to do with good maths.
Budgeting is all about INTENTION.

Almost everyone knows that the best way to succeed is to set goals and work towards them; say what you are going to do, do it, tell everyone what you did, and enjoy the accolades.
The simple trick to being really profitable in business is exactly the same – setting goals and working towards them:

  • You decide what the business is going to do; make the business plan (sometimes called a Business Strategy)
  • You map out in money how the business is going to do it; make the budget
  • You do what you planned you would; run to plan
  • You report what you have done; do the tax return

Think of your Budget like a NaviMan (that electronic thing in the car that shouts directions so you don’t end up cross and lost). A budget is just like the calculated path and arrival time based on the destination you enter-in at the beginning. i.e. firstly you decide a destination (the equivalent of your business plan) then the Naviman plots out how to get there (the equivalent of your budget).

A budget should enable you to make more profitable decisions more quickly and easily
– if it isn’t doing that then your budget is a hindrance not a help.

Profit Tip for 30 June: Do A Budget

Getting your budget done is as simple as:

  • STEP 1 – Gather your Budgeting Calculating Ingredients
  • STEP 2 – Write down your Future Plans
  • STEP 3 – Sort out your Future Plans into Budget Headings
  • STEP 4 – Apply the dollars to your Budget Headings
  • STEP 5 – Do a Profitability Check

Even if you only write down 5 lines – one for income and four lines of expenses – you are creating a budget you can work with… Check your progress towards the goals monthly, you never know you might even make it!
For more information, these posts outline the details of each of the above steps so you can easily get started:

PART 1 – How to Start a Budget and why Bother
PART 2 – How to Build a Budget (and improve your profits)
PART 3 – Make your Budget work for you

As you practice you can fine tune your skills and budget worksheets to get more and more accurate, moving onto forecasts and rolling budgets.

This time of year Newspapers are reporting “30 ways to get ready for year-end”

“Do this quickly”, “Hold off on that” “Pay some things now and other things later”…

Same old, same old! I never understand why these articles focus on last-minute rushing around – perhaps this is a “slow news” time of year? So, consider spending the same amount of time and effort lining up your ducks instead – review (or build) a budget. A really good, really useful budget.

Simple? – yes!       Boring? – maybe to you right now, if you haven’t used a good budget yet.

By all means go off to hurry about adjusting this and that; remembering that for the most part the suggestions have a significant impact on your cash-flow – any consideration of which is usually omitted in these Tips, even from their disclaimers. But also give budgeting a go, HAVE A PLAY, get a taste of the new power at your fingertips and grow your skills from here.

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Think you’ve got an Excuse?

I have heard every excuse under the sun! Here are some responses to the main ones

  • “I don’t know exactly what is going to happen next” – it doesn’t matter; put down what you would LIKE to happen – the benefit is a very clear way for you to establish your measures of success for the year to come.
  • “But my plans may change during the year” – never mind; you can adjust your budget to reflect new goals or challenges – the benefit is you can also clearly see the impact and outcomes of these changes and when, where and how to make management decisions to stay on track.
  • “What if I get it totally wrong to start with – all the better; the benefit is you will learn more about your business is actually doing, instead of acting on what you assumed your business was doing.
  • It isn’t perfect – go right ahead and keep it private for a while so no-one can judge you. Eventually you can follow best practice and create your budget and plans involving your team, and maybe even your customers and suppliers,the benefit of being private is to build your confidence first and simply keep it close to your chest (just make sure you still peek at it often)

 
 
 
 
 
 

What are your Tips for 30 June?

Add your good new year’s tips to the comments below for all to see and use.