Five Questions to Ask Yourself When Preparing Your Business Budget

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Five Questions to Ask Yourself When Preparing Your Business Budget| Futurebusiness

Making the best use of your money is a business-critical task and preparing a budget – whether it’s for a single project, or for the year – can be a daunting task.

In order to make the best use of your time, resources, and of course – your money, you need to have a strategic plan developed ahead of time.

Here are five key questions to ask yourself when preparing your business budget:

What am I Preparing this Budget for – What is the End Goal?

It sounds extremely obvious to say, but it’s incredibly important that you identify exactly what it is you’re doing this for, and what you want to achieve with it. As we mentioned, it could be a single project, it could be a yearly projection, or it could be something else – like an unexpected need to upgrade, or an annual renewal.

If the task involves a repeat payment for something that is already established, you should check that it’s still relevant, and that the current course of action is the most effective – it’s far too easy to simply keep approving a process without checking, and wasting money because situations or technologies have changed in the meantime.

What are my Financial Resources?

Before you can start allocating funds, you need to know what’s available. This process should identify how often those funds are coming in (and their sources), and whether they are consistent, reliable, and on-time.

If you have uncertainties or fluctuations in payment times, you need to make this part of your budget planning –  so you have the ability to adjust, adapt, or draw funds from somewhere else if the expected resources aren’t in your bank on time.

What is the Expected Return on Investment (ROI)? How will I Measure it?

In order to make the best use of your funds, there has to be some sort of ROI – this could be financial (especially if it’s a product or service) or it may be functional (such as upskilling staff or improving efficiency) that leads to a later more tangible ROI.

Knowing what you expect to achieve, and determining the Key Performance Indicators (KPIs) to measure the success or failure is essential.

KPIs could be direct, such as increased sales or profits, or indirect, such as website performance (reduced bounce rates), brand recognition, etc.

You need to look carefully at your project or task goals, determine what KPIs you should be monitoring, and decide on how you will collect this information, so you can review it on a regular basis throughout the project / task duration.

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