You Can’t Get There Without a Roadmap
Somehow, it’s the end of January already. As you close the month and look ahead, are you finding yourself prepared and organized for the next eleven months or just getting by day by day? If you’re in the latter group, it’s time for a reminder about the importance of budgeting and forecasting to make sure 2022 is your best year yet. After all, without a roadmap, how will you know how to reach your destination and make it your best year yet?
While that roadmap is primarily made up of major routes (or financials, in this case), those routes are connected by other, less obvious ones. They include other business considerations and running a lean operation while still meeting business goals. They may not get as much attention as the major routes, but without them, it will be much more challenging and time consuming to get from Point A to Point B.
About the Numbers
It’s no secret—the numbers are the very foundation of any business. Simply, they pave those routes that allow us to move forward. As such, they are always our place of origination. When it comes to budgeting and forecasting for the year, it’s important to remember to:
- Start with actuals. Unless you just started your business in the past few months, you have a year’s worth of data that will provide insights into where you were and where you’re going. This is a crucial starting point, despite the continued pandemic-related challenges businesses experienced last year.
- Continue with projections. Use the insights you gathered from last year’s numbers as a baseline to forecast this year. In doing so, ensure you estimate conservatively. You never want to be overly optimistic in your projections. So, estimate on the low end for revenue and on the high end for expenses.
- Expect the unexpected and the expected. You know taxes and other annual fees are coming due. Maybe you have some loan repayments to take care of. But think about what else you may have to pay out this year and make sure your budget accounts for it. The last thing we want when it comes to budgets is a surprise.
- Adjust regularly. Make real-time adjustments throughout the year. These adjustments should be made quarterly, or even monthly, to align the budget with actuals.
Beyond the Numbers
If the last few years have shown us anything, it’s that there is much more to running a successful business than just financials. We need the numbers, of course—we can’t drive along those roads without them. But we have seen firsthand the importance of leadership, company culture, employee engagement, and emotional intelligence as we navigated our way through a global pandemic and all of its inevitable, and sometimes surprising, consequences.
To create yearly goals without stress, we must consider and address what is outside of the numbers. With the economy and employment in a seemingly unending state of turmoil, it’s important to anticipate the following (along with their impacts on the budget):
- Changes in leadership,
- Staffing shortages,
- Mental health issues,
- Increasing employee engagement experiences,
- Product delays, and
- Increasing prices.
How to Be Lean and Still Meet Goals
While we’ve been hearing about running lean businesses for years, it has come back to the forefront recently. Between pandemic closures, remote workforces, and the Great Resignation, more businesses have had to find ways to maximize value while minimize waste. They have focused on improving processes to create more efficiencies and value, with less surplus. However, running lean does not equate to sacrificing goals.
You can still get the results you want, while running a lean business. In fact, when you begin to reimagine how to operate to avoid waste and increase value, creativity and innovation tend to soar to new levels. For example, like thousands of other businesses, we were impacted by the pandemic. Yet, we saw a need in the market for accounting automation. And we decided to do something about it. Within two years, and through a global pandemic, we were able to meet our goal to fill this need and develop and launch new accounting automation platform with AccountedCloud. We did this while operating lean—we simply got more creative.
Set yourself up for success in 2022 with an accurate, up-to-date roadmap that includes your annual budget, but also includes considerations outside of the numbers and a refocused effort on reaching your goals. After all, it’s difficult to reach any destination without a roadmap.
Budgeting can be hard, especially if you are on your own. At Agile Planners, it’s what we do. Our expertise can help you streamline the budgeting process and, most likely, help you consider things that weren’t even on your radar. We’ll partner with your business to help create the roadmap to the success you need – from budgeting to your books and beyond.
If you want to learn more, click here to contact us.
