Have Periodic Reviews of Your Progress Each Month!
To keep your business running smoothly, ensure you are checking your numbers periodically throughout the month – do this consistently, even when you do not feel like it. Checking your numbers periodically will help you to adjust before something avoidable happens. For example, you budgeted $40K in sales this month, by week two you surpassed this number – what do you do? If you are a retailing, checking your inventory at this point would mean you would either be out of stock or close to. By end of week one, you should have taken a stock of your inventory once you noticed your sales were likely to surpass your budgeted numbers. Running out of inventory can cause your customers to turn to your competitors to meet their needs. This could mean you might have to work twice as hard to regain lost customers which can become costly.
If you are keeping proper records of your sales, doing a quick sanity check can help you avoid simple mistakes which can then turn costly and affect your business and the market share it might hold.
Tie Your Budget to Your Marketing Plan
Marketing plays a significant role in how and if you will meet your sales target each month. How do you market your products or services? Social media is becoming the go to medium for marketing and getting your products and services in the face of consumers. Rightfully so, as technological advancement now allows businesses, both big and small, to take advantage of direct marketing.
What is direct marketing? Direct marketing is simply the ability of a business to market their goods and services directly to their customers cutting out the need for any third-party services. Instagram and Facebook are dominating the direct marketing space. These platforms cost very little depending on your spending appetite which means higher return on investment spent on marketing.
If you do not actively market your products and services, achieving your sales target might become problematic and creating a budget in the first place would have been a waste of time. It is great to set goals and objectives, however, if you are not going to actively work toward achieving these goals and objectives it makes little sense putting them down in the first place. Look at it this way, if you make breakfast in the morning but do not eat that breakfast how would you not be hungry? The breakfast will not magically find its way into your system, you must actively eat. The same is with your marketing plan, if you write these plans down, but do not actively pursue them, how will you achieve your targets?
Compare Your Actual Results to Your Budget
Big companies engage in comparing actual results to budgeted figures. Management is expected to comment and provide in-depth analysis of the company’s results and give explanation as to why targets were missed or even surpassed. Engaging in actual to budget analysis and digger deeper in variances helps business owners put things into perspective is also a “reality” check. With the velocity of our economical environment these days, things can change before we have the reflex to respond quick enough to stop or mitigate any huge damaging impact. It might seem like a lot of work in the beginning, however, once you are keeping good and clean records and you have a user-friendly accounting software, doing quick comparisons will become easier.
MOMENT OF TRUTH: Do you have a budget?