For those of us living and running a business in Australia it is time to prepare for the new financial year.
What do I mean by that? Regular readers of my blog will know that I am a firm believer in the saying “If you fail to plan, then you plan to fail”. Sounds harsh? Maybe, but really how do you expect to succeed if you don’t know what it is you are trying to achieve?
This is true for all aspects of our life but for now, back to next year’s budget.
I would suggest that you get together with your team, analyse this year’s results; find out what worked and what didn’t? What did the team learn, what can be done better? What didn’t work? Look at your products’ life cycle; are there products that need to be culled from the range? Which products are doing the heavy lifting? Analyse your customer feedback also at this time; what do they want more of, what don’t they like about doing business with you?
From this point we should have the following list:
- Profitable products/services
- Non-profitable products/services
- Products/services with increasing sales
- Products/services with decreasing sales
- Products/services your target market want
- Products/services your target market don’t want
- A sales process that your customers enjoy
Now with this data we are ready to prepare next year’s budget.
Start by creating your new range of products/services from the list above; the ideal being those that are profitable, increasing in sales and catering for your target markets wants & needs. Determine the appropriate price points which will optimize these strengths.
Now add to that by streamlining the sales process making it a joy for clients to not only become regulars but to also refer your business to others!
From here it’s time to do your sums! Work out your sales forecast by product for the year on a month by month basis. Can you back-fill slower months and/or relieve bottle-necks in busier ones? Are you on track for a growth year according to this first draft? If not what do you and your team need for it to become a growth year? Fine tune your budget until it is S.M.A.R.T. i.e Specific, Measurable, Achievable, Realistic & Time-Bound.
There you have it; next year’s budget. Isn’t it worth the effort to take the time and do this properly?
And remember, if you fail to plan, then you plan to fail!