The federal government’s fiscal year comes to an end this month, so now is as good a time as any to talk about your company’s budget. Building an appropriate budget is one of the simplest, most crucial steps in keeping your business afloat throughout the year. Exactly how much you should budget for depends on the projected needs and current circumstances of your business. However, there are some overall strategies to consider when going through your budget.
Don’t Stifle Your Marketing
This doesn’t mean you should give your marketing team a blank check to experiment with any idea they think of. But if you have a marketing strategy that works, why put a cap on it? Once your company figures out a marketing investment of $1 that converts to $3, for example, give yourself the freedom to be flexible with your budget and throw
some more cash their way.
Consult All Departments
One person should not be in charge of working out the company budget all alone. It doesn’t matter if that person is the head of finance or the CEO themselves. Reach out to all departments in your company and find out their expectations for the coming year. Find out each department’s costs, revenue assessment, and any possible concerns on the horizon. This will allow you to create a budget that better reflects your company’s
current state, rather than relying on a projection for the future.
Pay Attention to Financial Relationships
No part of your budget exists in a vacuum. If you increase or decrease the funding for one area, something else will have to be modified, too. For example, if you intend to grow your team by 15 percent, you can’t just increase the payroll budget by 15 percent. You’ll need to look at the cost of employee benefits, the supply budget to accommodate new team members, and how the cost of the annual Christmas party will increase when 15 percent more employees bring along their plus-ones.
The most important thing to remember about your budget is that it’s never really done. You shouldn’t put your budget away until next October. If you monitor your budget on a monthly basis, look for trends, and change things as needed, your business will be much better off.
Thanks for reading,
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