by Ben Wilson
One of the most powerful strategic planning tools available to business owners is the effective implementation of budgets and forecasts.

These financial management tools are essential for promoting growth, profitability, and overall success. Not only do they serve as a strategic benchmark for the period, they assist owners in implementing and monitoring progress, breaking down goals, and supporting finance applications.

Plans For Growth And Profitability – Strategy Is Essential

Budgeting and forecasting serve as the backbone of any successful business strategy. By projecting revenues and expenses, you can develop a clear roadmap for your company’s future growth and profitability.

A well-crafted budget helps you allocate resources efficiently, identify potential financial challenges, and set realistic goals for expansion.

A forecast, on the other hand, allows you to make informed decisions based on market trends and changing business conditions. By combining these two elements, you can create a comprehensive strategy that sets your business up for long-term success.

Monitor Progress And Adjust Actions

One of the most significant benefits of a budget or forecast is its ability to break down your overall goals into more manageable actions. By setting specific targets for each period (monthly, quarterly, or annually), you can create a clear action plan that will guide your team in achieving your objectives.

This approach not only simplifies your financial management but also allows you to monitor progress and adjust as needed. With a clear understanding of the tasks and milestones required to achieve your goals, you can keep your team focused and motivated, ultimately leading to a more successful business.

Support Your Finance Applications And Control Your Cashflow

Effective budgeting and forecasting can also play a critical role when it comes to securing financing for your small business. Lenders and investors often require detailed financial information, including budgets and forecasts, to evaluate your company’s potential and viability. By presenting a well-structured financial plan, you can demonstrate your commitment to growth and profitability, increasing your chances of obtaining the funds you need to expand your business.

In Practice: A Real Life Case Study

A real estate agent personally selling the highest value of listings per month in his local area, had started his own agency 2 years prior to engaging with Lambourne’s consultants. Despite his personal sales performance, the entire business was unfortunately not turning a profit.

Through discussions with the owner we came to understand the operating model of the business, and recommended a budget and forecast be prepared for the business, looking at the revenue generating activities from the ground up. In preparing this forecast we were able to provide the owner with a clear, high level view of the required actions to meet the his targets. These forecasts were uploaded into his management system, custom variance reporting was produced, with a process set for monthly review of performance against these forecasts. A year later, the business had exceeded this forecast in eight months of the financial year, reversing previous profitability trends and beginning to build equity in the business for the owner.

How We Can Help Your Business

By planning for the future, monitoring progress, breaking down goals, and supporting finance applications, you can take control of your company’s financial future and set your business on a path to success. We at Lambourne Partners believe this is the perfect time to focus on the strategy your business will implement over the next financial year, and have increased our resources to be able to further support our clients in their planning process.

Our expanded Consulting team have experience across a range of industries and have implemented various forecasting and monitoring strategies for our clients in the past with great success. To discuss how we can help your business, contact us below or call (02) 4969 6600, or if you’re an existing client, just ask your trusted advisor.

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