If you’re a member of SGI, you’ve likely heard the phrase, “Plan or be planned for.” It’s a simple message, but the impact of those words is profound. In business and in life, you can either plan or be planned for. If you don’t make a plan of where you end up, one will be made for you and you’ll wind up somewhere that you never intended. The key to achieving what you want from your business is to have a budget and a plan.
Ask Yourself These Questions:
- What do you want for your company?
- What do you want for your customers?
- What do you want for your employees?
- What do you want your company to become?
Now, there are many components in a complete business plan, but today we’re going to focus on your budget. A complete business plan would include: Executive Summary, Company Overview, Products & Services, Marketing Plan, Operational Plan, Man-Power Plan, Management & Organization, and a Financial Plan.
The thought of creating a budget can cause some contractors to break out in a cold sweat—but you shouldn’t worry. A budget isn’t big and scary. Quite the opposite. A budget can be a business owner’s best friend.
Simply stated, a budget is a quantified, planned course of action over a definitive timeframe. A good budget can be the difference between financial success and insolvency for your company. A good budget helps you to assess whether your business will have adequate financial resources to stay the course and achieve the vision that you’ve created.
But don’t be confused. A budget is not a goal. A budget is a PROMISE! It’s a promise to yourself, your family, and your team of what you will accomplish and how you’ll get there. It should be evident by now that having a budget is vital to your success, but still, some people skip this step and ask, “Why do I need a budget?” Well, let me tell you just a couple of things your budget can do for you!
- A budget will hold you and your team accountable to what you must do daily to achieve the results you want for your company. As you know, what gets measured gets achieved, and without accountable actions, your goals won’t be achieved.
- Your budget drives your team direction. They’ll know, for example, how many calls they need to book and run each day to hit the goal. A budget creates the course that a professional team can follow to achieve success.
- Your budget breaks your overall vision into manageable numbers. Those big, long-term goals that you have can be broken down into yearly goals. From there, you can break your annual goals into monthly, weekly, and daily goals by department. Once you have daily goals, managing your company becomes an exercise in making sure your team has the focus, ability, and skill to achieve those goals.
Simply put, your budget creates a road map to success. The destination at the end of the map is your goal. In the contracting world, you should be able to increase your revenue by 20% per year and increase your profitability by 15% within five years. (If you aren’t doing so, you should consider attending one of our Profit Days at a city near you to figure out how you can!)
Now is the time to start making the winning plan for your company. Happy Budgeting!