Not too Late to Budget
Operating a business is difficult, especially a small business. Small business owners wear lots of hats to operate their business that do not involve directly delivering services or products to customers. Since products and services to customers generates revenue, it’s easy for that other stuff to take a back seat.
One paper estimated that budgeting and planning accounted for 12% of the variability in financial performance in a sample of Midwest companies. (Foster, 2017) Budgets provide you with a market to measure yourself against. They force you to make assumptions about how your business will play out over 1-12 months. This exercise won’t correct a bad strategy, but it will force you to acknowledge things aren’t going to plan.
That’s where a budget’s power lies. It’s a tool to force mindfulness into your business practices. We advise our clients to begin their budgeting for calendar year companies in October or November. If you are behind, start today. Even if your first budget is for 10 months, it will help you this year and you will be better prepared for next year.