Sometimes plans go off course. We plan to focus. We plan to market. We plan and we budget.
We plan to do a lot of things but sometime the best laid plans fail.
When that happens, you come up with a new plan, a new focus, a new goal.
That, of course, leads to a new budget or a ‘reforecast’ of an old one.
Reforecasting is nothing but creating a mid-term budget based on the new information/data gathers.
I go through this process every quarter with my clients and in my business.
As you evolve and as your business evolves, you learn more about things like lead time, your ideal client, products and service development.
More knowledge & more data = more accuracy in budgeting = being able to predict cashflow better = better planning.
Better cashflow and better planning = happy clients (for me) and a happy cfo (for you).
So what do you need to be a happy camper in your business?
First a few caveats…
(1) This takes time. You’ll need to watch for the trends and things in your business – how things flow in your business & with your customers – things like when are the slow times and when is it super busy for you.
(2) You are unique and as an extension of you, your business is unique too. Try not to compare yourself to others too much. Sometimes when we compare – we are disappointed because we are comparing our chapter 1 to someone else’s chapter 10 – they are so far ahead and it bums you out. So… STOP THAT! Keep your eyes on your own paper and keep your eyes on your own path.
Revamping Your Budget 101
So enough of that. Let’s get down to business.
The 5 quickie steps to get you on with revamping your budget and kicking the some bootie!
#1 Check Yourself – Part 1: Actual numbers:
Check your actual numbers.
Make sure everything is recorded, in the “right” place and answer a few questions.
How did you do? Did your sales go up? Did you spend too much on software, on advertising, etc? And most important…did you make a profit?
#2 Check Yourself – Part 2: Budget Versus Actual
Check your actual numbers against your budget numbers.
By comparison to where you wanted to be (your budget), how did you do? Did you hit your target or did you miss the mark completely? Were you close or not?
#3 Check Yourself – Part 3: Tough Love
Time for a little tough love. Maybe a lot of tough love.
The last two steps were about the cold, hard numbers. They are what they are. They are in the past. Nothing much you can do about them…but now it’s time to reflect on them.
Only honesty will do.
If you hit your target numbers (your budget) – AWESOME!
If you did not, we need to talk (or you need to have a little chat with yourself).
If you did not hit your target numbers,be honest… did you really do everything you could to get there?
Did you focus on your plan of attack? Did you follow your marketing plan AND execute?
Do a real analysis of what went well and want went wrong…
#4 Be Easy – Take a Break
Reflecting and analyzing oneself can be hard work.
Celebrate the wins and learn for the non-wins (no fails in my book).
I usually take a day or two to reflect.
Take some time to really think about the actions (and actions not taken) that brought me to this place… and start considering my revised plan of attack!
#5 Regroup, Revise & Revamp The Budget (aka Reforecast Your Numbers)
Knowing what you know now – about yourself, your business, your opportunities, your products, your services – what would you do differently?
This is the basis of your new revised and revamped budget. Your reforecast.
Ask yourself, was your original budget too aggressive? Maybe it wasn’t aggressive enough?
Was your timing off? Is your business seasonal? What’s the buying pattern of your ideal client? Is the buying cycle longer or shorter than you thought?
Do you need more time to bring a new product or service to market? Do you need more time to recharge your batteries in between new products or in between bringing a new client onboard?
All of this matters to your budget and the timing of your money (aka your cashflow).
It matters when you’re budgeting and reforecasting your future cashflow.
Take all of these questions and answers into consideration & make adjustments.
Time to pivot and adjust your goals. Use your actual numbers to create a new budget (or a reforecast) for the remainder of the year.
Done… you did it.
That wasn’t too hard, was it? I hope not.
If you have any questions, leave a comment below or shoot me an email.
Until next time,
Other posts and resources to help you out…
Budget Versus Actual…How Are You Really Doing?
Templates & Checklist (updated with new ones frequently)
Money Matters Checklist
Work With Me: The Cents Club
Work With Me: VCFO services