You are back from summer vacation. Your kids will be back in school this month. If your company’s fiscal year ends in December, your budget is due soon, maybe October. The pressure is on. Where do you start?The process can be less stressful this year. What will change in fiscal 2020 from your 2019 budget? […]
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You are back from summer vacation. Your kids will be back in school this month. If your company’s fiscal year ends in December, your budget is due soon, maybe October. The pressure is on. Where do you start?
The process can be less stressful this year. What will change in fiscal 2020 from your 2019 budget? There is guesswork involved, and some unknown unknowns, and known unknowns, such as the number of days of rain. Whether this is your first or 20th annual budget, here are key questions to answer.
1. Which programs and projects will you propose for next year? Synch up your programs and projects with your organization’s strategic plan. Which projects are the highest priority for the company? Every project has some degree of uniqueness. There will be probably be a mix of familiar, definable projects, very similar to those that your team has accomplished before. There will probably be projects you have never accomplished before. Be prepared to defend your time and cost estimates.
2. Will your company be entering a new industry, or niche? Sales and marketing projects may be required. Are customer surveys used to improve customer service? Have sales declined? How did target markets change since last year? Were some products retired? Which products or services are the cash cows? Are your new product ideas being stolen?
3. How will your human resource needs be different from last year? To do this, look at both routine work such as bookkeeping, and project work – and all resources you will need. Most use software for enterprise resource planning. Try to determine all of your internal resource needs, and external resource needs. This is big category, including everything from clean rooms, or other specialized facility, to temporary contract labor. For most companies, there will be a high-priority effort to secure company systems from hackers. For this, you are likely to require training and development of internal resources, as well as external experts.
4. Unless you are lucky enough to have a blank check you will need to put forward a convincing, logical budget to finance your company or department. How is the overall economy doing? Will downsizing or rightsizing make cuts necessary in several areas? Should you plan for a recession? How many projects were initiated? Any pending? Where is there pressure, or constraints on your budget? Is a competitor undercutting your prices? Do you expect an increase in your cash flow and/or your budget? Will your department be funded by cross-charging other departments? Is cash flow closely connected to your operations?
5. What are the changes for this year on your radar? Can new changes appear? Is your company growing rapidly, and you want to avoid growing too fast? Is a new cash cow needed? Some changes will come from the strategic plan, such as the desire to enter a new market or niche. More acquisitions? Is a reorganization in the best interest of your department or the larger organization? Can the benefits obtained from these changes be quantified?
Thomas Charles Belanger is a partner at Fitchburg consulting firm Plannapalooza Partners. Reach him at plannapalooza@gmail.com.
