Strategic Budgeting and Planning are two fundamental aspects for the correct administration of the financial behavior of any business. Both are complementary and necessary to guarantee the smooth operation and order: Estimating a budget is the first step towards the stability of the business; while the strategic planning allows the correct distribution of the investments. Let us go deeper in the budget and strategic planning to guarantee business success of your company.
Budgeting and Strategic Planning: Two Pillars for Business Success
In addition to the aspects linked to the novelty of the offer, opportunity, quality of service, and others; business success is directly proportional to the correct administration of the global budget by areas of interest. This includes the preparation and revision of business strategies, and its translation to numbers that account for the efficiency of planning.
And speaking of strategic planning; its main role is to precisely determine the direction of the business in the next years; and the means to achieve it. Generally, this consists in the description of the financial entries in a frame that describes the expected income offsetting the planed expenses.
Thus, the business objectives of the company are shaped by the budget and strategic planning to establish itself in the market. The correct combination of both focusses the resources in lowering the costs and accelerating the return on investment.
Budgeting and Strategic Planning: competitive advantages
Let’s see a summary of what strategic budgeting and planning represents for your company:
• Efficiently distributes the administration of resources
• Disposes and distributes the resources for projects in an appropriate manner
• Controls the performance and return on investment (ROI)
• Contributes valuable information for decision-making
• Identifies the risks before they happen
• Improves the ability to apply constant improvements and anticipate potential problems
• Obtains trustworthy and detailed financial information from where to make decisions
• Determines the direction of the business
• Measures the performance and the elements that positively and negatively affect the business
Now, to lead the administration of an organization is a daily task that is not simple. The budget is then an ally that improves the insight of the financial results; which are measured in terms of income and outflows; gains and losses, investment and expenses. In addition; it helps you activate alarms for those moments difficult to handle.
Budgeting and strategic planning: Practical advice
Do you have questions of how to initiate and meet your budget and strategic planning? We will give you some practical advice. Answer these simple questions:
• What numbers do you expect to get form your sales for the period?
◦ Tip: Try to have a realistic criterion.
• How much do you need to invest?
◦ Tip: Take cost of sales, materials, components, and contractors into account to elaborate the product or provide the service. Inform yourself of the real prices and reserve an extra entry for adjustments by inflation and similar.
• What are your fixed expenses?
◦ Tip: Take these concepts into consideration:
▪ Leasing terms of location, taxes, and service charges.
▪ Salaries, bonuses, insurance, etc.
▪ Utilities, phone, internet, etc.
▪ Office materials
▪ Transportation expenses
▪ Advertising and marketing
When gathering all this data with the estimated numbers, you may calculate an estimate of the utility perceived at the end of the budgeted period. Likewise, you will be clearer where the bulk of your costs is, and find a way of lowering them.
Automated tools for budgeting and strategic planning
Relying on automated tools for budgeting and strategic planning is the most intelligent option today. With them, you may apply these healthy business strategies and simplify all the process while reducing the time employed on them. Thanks to them, you will have a dynamic, unified, congruent ally; always available and centered on the desired results.
As we have already stated, budgeting and strategic planning are two fundamental and complementary aspects to guarantee the smooth operation and order of your company; and guarantee its stability while you carry out an accurate distribution of your investments.
At Fusionworks we have an extensive catalog of automated tools to control the budget and strategic planning that without a doubt, will bring success closer and faster to your company. Contact us here and we will take you through them, and design with you the plan most in line for you to adopt them without further delay.