A realistic budget and a sound financial management system is the most important element to growing your small business. Having the right system and making that system a religion in your business is the difference between carefully monitoring, planning and ensuring growth and operating in an environment of financial surprise and despair. An environment that virtually guarantees no growth.
Let’s take a look at what it takes to establish this type of system and how best to monitor it.
- Step 1 – create a detailed budget and be disciplined in its use.
- Step 2 – create and implement the budget monitoring system.
- The entire team must be on board and adhere to its implementation and usage.
- If any member of the team resist the use of the system that person does not belong.
- Software selection is important. Enlist the guidance of an expert and don’t overspend, since it can easily happen.
- Monitoring – an efficient system is monitored and adjusted on a weekly basis through weekly reporting. The reporting system must not be complicated to use. Report on broad revenue, expenses and profit as compared to budget/goals. Weekly reports are generated from the bottom up and every reporting member of the team must adhere to the system and its deadlines.
- The plan path – weekly leads to monthly, monthly to quarterly and quarterly to year end results and successful budget performance. Each step along the path leads to annual growth for the organization.
Take the financial management system to heart. It is the foundation of growing your small business. Ideas can be great, marketing may be tops, customer service can be the best and you can have the best sales person/team, but if you do not have and maintain financial management and budget control your organization will struggle with growth and ultimately fail in its attempt to grow.
Finally, if your corporate culture is not suited or energized for this type of financial monitoring and management it’s time to change the culture to ensure the growth of the organization.
Let’s Get Busy Growing