This the season to be jolly. Budget times are fun where what we plan to do in the future we boil it down to numbers. We can be optimistic, pessimistic or just plonk last year's figures with a bit of more experience of how thing 'should' develop in the year ahead.
Budgeting for Success is a programme we do periodically and we just love it as it gives the manager a hands on scientific modelling exercise in forecasting and seeing through the fog of the 'future'.
Here we are sharing some tips:
1-Budget realistically not for the 'figures'
Budget as realistic as possible. A technique called 'Optipess' allow you to take two extremes and aim for an average position. Reality is a shade of grey
2-Be detailed as possible
With the help of spreadsheets you can get to as many details as possible and once you build the model you can play around with different scenarios.
Budgets will affect all of us. So ideally we should give our input. So do some discussions on the figures for the year ahead.
You need to think about the drivers of the underlying industry. Who will move who and when and how. These are the real economic drivers both up and down stream.
Do the figures make sense. Although bygones are bygones the market is evolving and usually trends have their harmonics - meaning that trends will continue to evolve over time.
So whether it is a departmental or a company wide exercise the budget should help you to define the year ahead in numbers. Barring massive macro economic outbursts usually we are spot on.
“Life can only be understood backwards; but it must be lived forwards.”
― Søren Kierkegaard
Managing Director and Chief Programmes Officer based in Malta and an avid entrepreneur who likes sharing his expertise in various fields with people from all walks of life.
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