Leaders of growing companies know that planning is key for continued success. If you haven’t looked ahead at your not-so-distant future strategy, it’s time to evaluate where your business is and where you want to take it moving forward.
Use helpful forecasting tools
Forecasting and budgeting tools simplify the process of planning for growth.
Capterra is a free service that helps businesses find the right software solution for a variety of services – from barcoding to performance appraisal. Its list of Top 10 Budgeting and Forecasting Software will reduce the time searching for the best tool for your needs.
Also consider a different approach to how you’ve handled forecasting and budgeting in the past. On the hostanalytics.com blog, a recent post “A Call for Change: 6 Indicators You Need A New Approach to Budgeting” explains, “The first step in any budgeting process overhaul is to identify the need for a change.” And there are warning signs of problems on the horizon…
6 red flags in your budgeting overhaul
1. The budgeting process is taking too long.
2. You aren’t satisfied with your planning capabilities.
3. You’re spending too much money on budgeting.
4. Your forecasting performance is struggling.
5. Your budgets and plans lack long-term visibility.
6. Your budget isn’t providing the flexibility you need.
How to perform your analysis
If you’re looking to develop a more aggressive budget you may need to forecast sales and expenses over a multi-year span. Along with reviewing sales and revenues from previous years, pay close attention to the comparison of sales to expenses such as rent, materials, and salaries.
Are economic conditions in your industry and/or locale (if applicable) such that you can expect to achieve the same profit in the next year or more? Will there be a burgeoning demand for your product? Should you invest in equipment that enables your staff to work more efficiently? Is it time to add new products/services?
Be realistic and weigh the negatives (e.g., new competition or unexpected loss/damage). Also consider whether an alternative financing solution could play an important role in your growth plans.