Develop a Plan and Use a Budget
Although it is the opinion of this author that the time spent detailing a plan for the business including what the financial results will be is very important, the reality is that most business owners will not take the time to really focus in this area. There are a couple of suggestions that can be easily implemented to aid in this area.
One suggestion is to use a written set of goals. This does not need to be long, complicated, formal, or time consuming. It can be a simple as a list of goals for the year with a few tangible things to accomplish to get there. The main point is that it is something that is looked at often and revised as needed. It is a functioning document in planning the direction and decisions for the business. If something more structured is acceptable, a good place to start might be developing a one page business plan. For more detail on what this type of plan looks like, visit www.onepagebusinessplan.com. What ever feel most comfortable is fine, the main point is to write down some goals, make progress towards achieving them, and document that progress.
Another suggestion is to use the power of QuickBooks. An easy way to start to develop a plan and related budget is to start with the previous year’s Profit & Loss and customize the report so the columns are by month. By using the Excel interface it is now easy to change the numbers to reflect the anticipated results for the current year. Using the export/import function set up the budget for one account in QuickBooks and export the budget list. Open it in Excel to confirm the correct format for the header and detail lines. Copy the information from the changes made to the Profit & Loss, save the file, and import. This process will then permit creating budget versus actual reports with the push of a button. The software will prorate the results for the month for the budget columns so it is easy to confirm that everything is proceeding on track. The next year, the budget can be exported, changed as needed, and then imported to keep the process going.
If you don’t know where you are going how are you ever going to get there?
More information on this topic
Planning and Budgeting