According to the Wall Street Journal, 60-80% of business owners don’t know what their financial statements are telling them. I know what you’re thinking. “That’s not me.”
Everybody has a plan for how they are going to get from point A to point B. If you’re taking a vacation, the Triptik will tell you where the next turn is. Going to the other side of town, use your GPS. When you go to a restaurant, the menu tells you what your next course could be. You look at your cable TV guide to see what the next shows are going to be. You should be doing the same thing for your business.
But a budget is more than just knowing what your destination is going to be. The final net income at the end of the year is not the only number that’s important. Your budget is ideally a roadmap of how you’re going to get to your destination. The optimal steps that you’re going to take to get there. It takes all the factors of how your business runs and puts them into a plan that gets you to your goal. A proper budget isn’t just a few basic numbers that “fill in the spreadsheet.” Each of those numbers has a meaning. They build the story.
If your budget is to guide you to your ultimate goal – a certain level of profitability – then you need a clear picture of how you’re going to get there. A CFO has the knowledge and experience in putting together an optimal budget that builds your story. The story of how you’re going to get to the end of the year. The detail is important because it will be your guide for how you can reach that end result. As you look at your monthly income statement and compare that to your budget, an optimal budget will show you exactly where your expenditures and income didn’t meet your expectations.
But just as importantly, it will give you detailed guidance as to what you need to adjust to make those numbers work as you go through the rest of your year. Your CFO has a detailed understanding of what went into the budget and what you can and should change to get yourself back on track.
The skilled executives at CFO Simplified are ready to help you put together your optimal budget, which will guide your business on how it should operate this next year. It’s the roadmap that gives you confidence that you’re on the right track. Contact us today to begin discussing how we can help your company.
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