

This is such a wonderful time of year. The holidays are approaching and you have the opportunity to celebrate with family and friends, and perhaps even slow down before the New Year arrives. Then someone like me starts beating the drum to remind us it’s planning season for 2016. Woohoo! (More like boo-hoo for many businesses.) Here come the excuses:
Yep, over the years I’ve heard it all. So let’s start by calling the process “Profit Planning” and not budgeting. Budgeting sounds like a huge chore. However, Profit Planning is the process of taking control of creating your 2016 destiny.
In a future article, I will cover why all businesses need an annual Profit Plan and how it can help your business succeed. For now let’s focus on getting the process started, which is where I find many businesses get stuck. Since it’s a process, it takes time. Profit Planning needs be thoughtful and include your key employees. Preparing a plan without other’s input will likely set you up for failure. Buy-in from those that will be executing the plan is critical. It will help establish the accountability for the results.
Here, I’ve outlined my 4-step process for preparing the Profit Plan. It can be tailored to your specific cost & expense structure. It’s simply: Pinpoint – Prepare – Perfect – Proceed.
Within your process, you will want to identify the person primary responsible for each line item with the projected start and complete dates. This will help you manage the process and the team members involved. The Profit Planning process normally takes between 6-8 weeks with a consistent and committed focus. That’s why it is so important to start the process now to ensure the quality of the plan.
Next time, I will be discussing tips on preparing the Profit Plan and Forecasted Cash Flow including how to set it up in Excel. If you can’t wait, please email me and I’ll forward you an early copy.