As part of a panel of industry experts, I had the honor to speak with a women’s business group awhile back. The group was made of up of both successful business owners with many years of experience as well as women who were just starting new ventures. (Side note: Being the only male in a meeting with 30 women meant I was either the luckiest guy alive or I should be very afraid!)
For my portion of the program, I addressed how basic accounting principals, if managed correctly, could help these business owners operate their companies more successfully. To fully understand and connect with the audience, I opened the discussion with the question:
“Do you allow the “B” word to be used in your business?”
In hindsight my opening may not have been the most politically correct, but luckily the audience laughed and jumped right into a traditional boring conversation around “BUDGETS”.
While budgets can be restrictive, if utilized properly, they can serve as an incredible tool to help a business stay on track during both difficult and successful seasons.
Part of our process at Fulling Management & Accounting is to listen to the business owner and develop a budget based on the goals that they want to accomplish.
Once the budget is established, we provide the business owner with a budget-to-actual-income statement each month so we can track the progress towards reaching their goals. This allows the business owner to make adjustments throughout the year to stay on track.
As just one example, recently I was working with Tim, a local Kansas City business owner. His business sales were right on track compared to the budget, but there were a couple of expense categories that had quickly gotten way off track.
Once we identified the specific problem areas, he was able to make the necessary changes in how those areas were being managed. For Tim’s company, it resulted in a $5,000 per month savings by getting back on track! Tim definitely uses the “B” word in his business and by doing so has greatly improved his profitability.
Now that's something we can all get our arms around. If your business needs an accountability partner to help manage the budget, we'd love to help!