The theme for Thrive vol. 4, was building certainty and confidence for FY23 with a robust Budget. We introduced the Budget cycle and walked through the steps involved in building the first cut. In this issue, we move on to Part Two: Building your Action Plan.
Once you have completed the first cut of your Budget, the next step is to circle back to your Total Costs for a sanity check. Is your proposed cost structure strong enough to deliver your Required Revenue figure?
As yourself questions like:
- Do we have the team we need to achieve this level of revenue? Staff, contractors, external experts, advisors…
- Do we have the operational capacity to deliver this level of revenue? Premises, machinery, vehicles…
- Is our market big enough to achieve this level of revenue? Do we have the required brand awareness and reputation to secure our market share?
- Do we have the marketing set up and advertising budget required to deliver this volume of sales?
Cycle your way through the five components of the Budget cycle, tweaking and adjusting your estimates and targets until they are all realistic and in alignment.
Rather than simply pulling numbers out of the air, these tweaks and adjustments need to be backed by tangible actions and improvements. This is where your Action Plan comes in – a prioritised list of the tactics that will make your targets reality.
There are a myriad of tactics that you can employ to realise your Budget targets. Broadly-speaking, these tactics fall into three high-level categories: Increasing Revenue. Increasing Profitability, and Decreasing Costs. Here are some examples to kick-start your thinking.
Your Action Plan can be as simple as a one-pager outlining each action, the person responsible, when it’s going to happen, and the first step to get things moving.
Be sure to book non-negotiable time in your diary throughout the year to hold yourself accountable to your actions. Or better yet, have someone else hold you accountable. There’s no use waiting for year-end to see if you’ve hit your targets – best to assess regularly and change strategy quickly if required.
Finally, remember that your Budget is not set in stone. As your situation changes, you can adjust the figures in your Budget cycle and see what it means for your Net Profit.
ACTION: Book two 90-minute sessions into your diary now – one next week and one the week after.
Dedicate this time to sanity-checking your Budget and building your Action Plan. Also book in your Budget Review sessions at the beginning of each quarter.
Having trouble applying this process to your business? A quick chat is often all it takes to get past a roadblock.
Book a FREE 15 minute Check In call with Darrin or Paul at a time that suits you, and let’s get your budgeting back on track.
It’s great to see businesses large and small booking chats with these fine fellas. We encourage you to do the same – you don’t have to be a Balanced client! Here’s to a confident start to FY23 for all.