Over time we have remained in continuous awe of the fact that over 50% of the small businesses we enter, under $5m in sales, have no budget. Entrepreneurs still tell us it’s because budgets are stifling, burdensome, and constraining. Too many small business people are still missing the message that a budget is a tool to illuminate goals and a benchmarking mechanism to help you evaluate how far you’ve come and how far you still need to go.
TIS THE SEASON! – Each year at this time we like to remind everyone – it is time to start the budgeting and planning process. For many, planning and budgeting for 2011 may be more challenging and beneficial than in years past.
It is probable that most small businesses have significantly modified cost structures during recent months to manage through evolving economic realities. Is there more cost savings to be found? Are annual expense renewals being missed? Have appropriate expense cuts, months ago, now retarded your business’ capability to re-launch initiatives for 2011 or your ability to take advantage of any lifts in business activity you may be seeing? What is your lead time for reinvestment to account for training in a ramp up?
LOOK OUTSIDE YOUR WALLS! – It is a for sure that the economy has dramatically affected the competitive landscape of your business. It is likely competitive powerhouses are weakened and some competitors are gone completely. Before you start your plan take a fresh look outside your walls for opportunities to link up with: alliances, mergers/acquisitions, or asset purchases and sales force sharing. A new economy also creates new opportunities.
CAN THE GOVERNMENT HELP? – It has become vogue to blame government officials for everything. The old joke – “I am from the government and I am here to help” – has taken on new meaning. But in reality there have been many new programs and initiatives created which may be of assistance and that could be factored into your plan. Invest some time and contact your accountant, banker, and industry association leaders to probe the potentials of new tax benefits, lending programs, or industry specific government programs you can take advantage of in the coming year.
WHAT DO YOUR CUSTOMERS WANT? – Nearly every client we are working with is evaluating a new product or service launch in 2011. If not, most are planning significant upgrades and revisions to their offerings. As your building your plan, if you are not planning something new that will either: increase your margins, increase your existing customer penetration, or allow you to enter new markets, check your pulse.
DO NOT LET UNCERTAINTY LET YOU BECOME UNCERTAIN! – This is the planning and budgeting time of year. Political, economic, tax and other uncertainties are not good alibis for doing nothing. If need be – do two budgets or a six month budget. Doing nothing will get you nothing in 2011.
