Pro-Tips of Planning & Budgeting in SME's & Start-ups
When it comes to SME's, most of the important tasks are done by the founder. Be it managing the employees, the finance or the operations he is keenly involved in making the decisions. A good businessman always has a virtual image of the entire business he is running. The growth potential of a SME's is tremendous keeping in view the opportunities available in the market.
Everyone plans various things in life as they want it to be but taking it on black and white helps you define and set standards. It gives you a pathway to lead your journey towards your successes. In the same way planning your business on black and white gives you a clear picture of the roadmap of your future. Our brain forgets the irrelevant data which gets very relevant at some instances.
• Capital Structure & Returns • Capital Budgets
• Strategic Plan • Cash Flows
• Operational Plan • Spending Budgets
• Sales & Marketing Plan • Sales & Forecast Budgets
• Human Resource Policy
Due to dynamitic nature of markets it is not always possible to follow the plan but to revamp and improve your plans is the most necessary part of planning and budgeting. The entire process helps you to set benchmarks for performing your business activities. A common mistake each SME's owner does is that they are flexible to their own policies and budgets as the situation arises. Sometimes being stereo to your plan gives you results which you are looking for.
There is no right time for implementing new policies in business; it is upon the owner of how they want to shape their businesses. It has been seen that a company which has been started in rooms have become biggest companies in the world. It is not always easy to put everything on paper and you will always need experts for it. Putting your money into planning may be burdensome at times but try to look at the opportunity cost of the same and it will give you your answers.
One of the most trending services in the accounting industry these days is the Virtual CFO Services provided by professionals who have immense knowledge of various industries and markets. They not only help you plan and budget but take an in-depth tour of how you can improve your businesses. CFO is one of the key people of any company because he takes into consideration all the stakeholders of the business. Analysis of plans and budgets is actually more important than preparing it because only then you can improve where you go wrong.
It is easy to say the importance of these things but far more difficult to perform it.
Some of the pro-tips for SME's & startups are:
1. Do it before your start.
The planning function is easy to implement before you start because making amends mid way has a transition effect and would be difficult to phase through.
2. Call the Expert!
Not everyone is capable to do everything perfectly and that is what experts are for. You may or may not afford the best in market but can surely do your due diligence to choose the best for you.
3. Feedbacks and Analysis
We saw that comparing and recognizing favorability/adversity is very important. By analyzing you get to know where you stand. Feedbacks actually give you correct view of activities performed.
Derived from French ameliorate means “To be better”. To get better make corrections and come up with a better follow up plan!