Budgeting: Is it Worth the Time and Effort? Do You Need a Map for a Road Trip?
Budgeting: Is it worth the time and effort? Simply stated – businesses should be budgeting for annual business plans, special projects, capital equipment purchases, new product development and more.
Businesses that fail to budget have no defined plan to project growth, manage and judge the performance of the business. Lack of any kind of budgeting in a business can be equated to taking a road trip without a map.
Any type of business budget sets guidelines and expectations for what the outcome should be for whatever is being done. People use a map to help plan their road trip to their destination. The map shows them where they can get gas, where they can stop for the night and road side attractions that they may want to see. A budget is a business map, that gives you information in real time and lets you know what actions to take now or in the immediate future that will keep the business on track.
Budgets need to be flexible as economic and business environments change during the year, just as a road trip needs to be flexible when you hit a detour. But in both cases, you need to get the business or the trip back on track to the final destination.
With no budget you will never really know if the business is reaching its goals.
Is budgeting worth the time and effort, the answer is YES! Everyone (owners, managers and employees) want to know where the business is going and how it is going to get there.