Budgets are your business financial story. Your budget translates and converts your business story and action plan into financial terms. Check out my previous podcast which talks about why your business plan is a smart way to map out your future story.
In this episode of ‘I Hate Numbers’ I am going to be talking about budgets. How to develop, producing and using your budget helps turn your business dream into a closer reality
Why you need a Budget
Your budget is your 12-month footprint, that normally connects with your three to five-year business plan.
Budgets create accountability and targets. Clear targets motivate people to high performance levels. The numbers in your business are used to create a budget, a plan, an aspiration.
Budgets are your stories of tomorrow. They show choices, aims and objectives. Targets are typically shown in terms of money, i.e. income, costs, and profits. Targets play their part in motivation and performance.
Building Your Budget
In this podcast I talk about starting with your business story and then using number Lego bricks to build the numbers you need to know.
Certainly actions have consequences. Sales and costs, profit and cash are affected by our actions. Listen to find out more
Monitoring and Making Judgements
“Your numbers are there to measure how well your business journey is going. Firstly, use your numbers to translate your business story into financial outcomes. For example, over performance is when income is more than expected, or costs less expected .
A cliched phrase is what ‘gets measured gets done’. While we are talking clichés let us throw in another, ‘manage what your measure’. Measuring and managing using numbers improves performance. Do not use any old measures, use ones that are controllable, relevant and meaningful to your business.
Good to Know
Numbers can be used to set targets. In other words, if you have targets you can control and improve. Above all, if targets are too tight and difficult your team will not give their best. Looser, or easier targets have little motivational effect, targets will be achieved.
In short, grab a coffee, make yourself comfortable, sit back and listen.
I love doing this podcast and sharing my love of Numbers with you. Check out the link to subscribe and do not miss an episode. Help me spread that Number Love by downloading it, listening, and taking action!
In This Episode
- Understanding the importance of your business story to create your budget
- Knowing how to assemble the key parts of your budget, using number Lego
- The vital role that your budget plays in delivering your business vision
- Developing your own Numbers confidence and decisions
- Take more control of your numbers to help make you money, survive and thrive