Rounding the Corner

We’re rounding the corner in the middle of the last turn on our annual business lap for 2023! We have four months to go, and for most of us, we still need to draft and finalize the 2024 goals and budget! Too many small and mid-tier companies bypass this critical process. Don’t you be one of them! Planning and budgeting are essential disciplines every business, regardless of size, should perform.
Planning is necessary for every for-profit, nonprofit, or governmental business. It provides the foundation for direction, stability, and scalability. The process involves envisioning outcomes for the next year and setting clear goals to achieve them. Your plan can be straightforward with only three goals or complex with hundreds of goals and corresponding milestones across multiple departments. A well-thought-out plan makes it possible to remain focused, stay afloat, and scale in the marketplace.
Reviewing past performance and assessing market conditions and your company’s market share and growth potential in the marketplace is essential to start the planning process. From there, consider what products or services are needed in the market and how your company can fulfill those needs. Create specific, measurable, attainable, results-oriented, and time-framed goals to achieve that fulfillment. Assign accountability champions responsible for achieving the goals and progress milestones for reporting purposes.
When planning, it’s fundamental to create a budget. Your budget is essential in making informed decisions, and accuracy is paramount. It supports your plan’s execution by outlining the necessary funding for goal achievement. Additionally, the budget is the basis for cash flow projections needed for making investment decisions. Your budget should project sales, cost of goods or services, operating expenses, and profits by month. The leadership team must review monthly the actual profit and loss of the business against the budget and adjust as necessary to remain on goal. As a leader, it’s crucial to understand how cash flows in and out of your business, regardless of your proficiency with numbers, and if this is a weak area of yours, get help!
Every business must engage in planning and budgeting. These activities are vital business functions that determine the company’s goals, resources, priorities, and outcomes in the marketplace. They also help the company to optimize resource consumption by unifying and focusing on what is most important for the company to be successful. The plan and the budget are critical documents that are the basis for decision-making. Without one or the other or both, the decision-maker is blind and uninformed.
As you approach the end of your fiscal year, it’s essential to start planning and budgeting for the upcoming year. Take advantage of the holiday season and dedicate time to finalizing and sharing your annual plan and budget. This will be a valuable investment of your time in successfully launching the next fiscal year!
COL Paul A. Raggio (Ret), the owner of Five Star Leader Development, is a fractional CEO/COO who develops C-Suite executives, business owners, and their management teams on leadership, management principles, and best business practices. Contact him to become a Five Star Leader! His email address is paul@fivestarleaderdevelopment.com, and his phone number is (252) 571-7368. Visit his website at https://www.fivestarleaderdevelopment.com.