Budgeting is not about accounting, it’s about being accountable!
We recently talked about the drivers that creates business results, the next part is to ask what you are going to do about it? Your budget won’t just give you a monthly sales target, for example, it will help you quantify the drivers that will produce the result.
For example, if next month’s sales target is $120,000, that end-result figure is not your focus. Not on a day-to-day basis. Knowing the underlying drivers, your focus will instead become, for example:
- 25 calls per day (Driver No.1)
- At 80% conversion rate (Driver No.2), with
- Each customer buying an average of $300 worth of products (Driver No. 3).
- Now you and your staff have a clear focus and are 100% accountable.
Knowing these drivers, and quantifying a target for each, you can ask questions like:
- Have the 25 calls been made today?
- If not, why not? Is the target realistic?
- Does the team need training?
- Do they need better telephone equipment or dialing software?
- Or just more focus?
- Or guidance on what their task priorities should be?
- Or a combination of these?
- Are we being effective and converting 80% of the calls?
- Again, if not, why not?
- You can then decide to improve skills, or systems, or attitude, or all three!
As you can see, the power of the budget is in the process of preparing it, and then the budget itself is a tool to hold you accountable to the measurable indicators you’ve chosen.
An added layer of accountability is us.
To take more control of your business and its performance, get in touch to make a time to come in and see us. Depending on the size of your business, we might work out that a quarterly process might work best (and be the most feasible, cost-wise), or your business might be at a point where monthly or even weekly guidance would be ideal.
We look forward to helping you chart your course, helping to get a clear direction, and then keeping you and your business on course.
So to avoid drifting we’ll outline your options and your costs to provide you clarity. It’s as simple as a phone call or email to get started