I can remember from my earliest childhood being aware of different “seasons.”  Beyond fall, winter, spring and summer (the favorite of every child), there were many others.  The new television season - in black and white and on the three major networks, but that dates me - and baseball season (an Ohioan by birth a Cincinnati Reds fan by choice).  In high school there was marching band season (“This Friday night the marching band performance will again feature a pre and post football competition against a rival school”) followed by wrestling season, followed by girl season.  As I grew up, I noticed the retailers had the Christmas shopping season, which has moved its start from Thanksgiving to just before Halloween.  As a parent, I became aware of the “Back to School” season with new clothes, now uniforms, and school supplies and text books.  In the business world, the “Back to School” season signals the start to another season…BUDGET SEASON.

With the 2011 Budget season looming, we’re going to take a look at what I like to think of as a “Successful Budgeting Checklist” to help make this a winning season for you and your team.  But before we get too far, let’s have a little budget “pre-season” and briefly review why you should even be worrying about budgets in the first place.  Here are the top 3 benefits that a good budget will provide your business. 

  1. Plan your work and work your plan – I know, cliché, but work with me here.  A good budget is a working document.  It is a plan for expenditures, for revenues, and a map for marshalling the resources to complete the top strategic initiatives for your business.  Without a plan, you leave it all to chance.
  2. If you can’t count it – it doesn’t count.  Another cliché?  Hardly.  What you measure you can manage and managing is the logical downstream action that you embark upon with your budgets.  Know your metrics – or “cost per” ratios.  Work from solid benchmarks in productivity and reliable forecasts.  In the end, this really is an accounting exercise.
  3. Always have a plan B – That’s not a cliché, so much as a statement my son made when he was six years old and wanted potato chips but had to settled for pretzels.  If you have a well thought out plan A, when things go awry (and things always go awry), you have a better shot at still succeeding when you have a plan B.  Having a plan B is a whole lot easier when you’ve fully vetted plan A – your final approved budget.

Okay, budgets are important—we’ve established that.  Now, to better help you transition into budget season, here’s a checklist for your reference as you begin work on your own budgets.

  • Take Inventory – Start with the physical inventory of equipment and supplies.  Team member productivity is dramatically improved when they have the proper tools and supplies to do their job.  Reduce the chances of having to explain “emergency purchases” next year and get a bump in team member morale by planning the repair and/or replacement of major equipment and supply stores.  This step goes beyond the physical stuff though.  Take inventory of your strategy.  Your organization’s Mission, Vision, and Values.  Embark upon this season with a strong foundation.  Tally up your organization’s training and development assets and assess their relevance now and for the upcoming year.  Do you anticipate needing an update in this department?
  • Start with the end in mind – How will things be different at the end of 2011?  What will success look like in December 2011?  How will you know?  What measures will be changed?  What initiatives will be completed?  So.  Many.  Questions.  But careful consideration of each is recommended for sound budgeting.  And to further muddle our discussion about the future; let’s talk just a second about the past.  When you’re thinking about the answers to questions such as “How will things be different at the end of 2011,” don’t lose sight of what you learned in 2008 and 2009!  Even if your organization made it through the toughest parts of the economic downturn without so much as a scratch, hopefully it at least got you thinking about some “what ifs.”  Budget season is a good time to tie a dollar amount to those “what ifs” and work them in to your organization’s budget.
  • Align Activities – Once you’ve determined how you want the future to look – go back to your foundation (Vision, Mission, Values, Strategy) and check for alignment.  Have you stayed true to your foundation?  Do your key initiatives and activities fit with your strategy?
  • Now do the numbers – At the end of the day, it is about the business.  Do the numbers.  With your end in mind, what do the numbers tell you?  How are your productivity metrics compared to past years?  What is going to be different financially and why?  What is the ROI of your major purchases and key initiatives?  Will you see improved customer satisfaction and loyalty?  Reduced costs?  Increased Revenues? 
  • Engage the team – The best budgets are built from the ground up on a strong foundation with the hands of everyone on the team.  A friend and former colleague likes to say “People support what they build” and he is spot on.

Someone once said, “A budget is just a method of worrying before you spend money, as well as afterward.”  While there is undoubtedly some truth to in that statement (that is, budgets are a source of anxiety for many a businessperson), budget season is when your organization lays the framework for its financial success in the future.  So, get in the budget season spirit!  Maybe serenade your neighbors with some budget carols or send an old friend a budget card—whatever you have to do to make this budget season your best yet!

So, in the spirit of feedback, tell me what you think. Click on the Comments link below to share your thoughts. We’re listening…and until next time – Take Care of your Customer, Take Care of each other, Take Care of yourself!  

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