From best practices, to forecasting, to budgets gone bad…
We recently hosted a roundtable discussion on budgeting and forecasting for high growth companies at The Junto Institute in Chicago, IL.
One of the key takeaways from this discussion were the essential questions to ask for each stage in building a budget.
“When building your business budget don’t get bogged down with office supplies but do get detailed with your biggest drivers, like income, COGS, and personnel expenses.”
Read related article: How Detailed Does My Business Budget Have to Be
The Essential Questions for Each Stage of Building a Budget
Stage 1: Creating the Budget
- What key assumptions are we making?
- Will we have the needed cash flow?
- What are our drivers of growth and costs?
Stage 2: Reviewing the Budget
- What assumptions were accurate/inaccurate?
- Why did we miss revenue? (long sales cycle, churn etc.)
- Why do we have lower profit margins?
Stage 3: Revising the Budget
- How should we revise our assumptions?
- Can we shorten the sales cycle? (e.g. using a free trial..)
- Can we automate a task that we do across all clients/customers?