A budget is a financial plan that outlines expected revenue and expenses for a specific period of time. A budget can be used to control your business by:
A budget helps you to set clear financial goals for your business, and provides a framework for tracking progress towards those goals. Financial goals may include revenue growth, profit maximization, cost management, cash flow management, return on invested capital, debt management, asset management and risk management.
By projecting expected revenue and expenses, a budget helps you to allocate resources effectively, and make informed decisions about where to invest time and money. The process of allocating resources will also help you prioritize projects, analyze the cost-benefits of specific initiatives, move capital between divisions or product lines, evaluate the performance of your management teams and aid in decisions about outsourcing.
Regularly comparing actual results to budgeted amounts helps you to identify areas where performance is stronger or weaker than expected, and make changes accordingly. A thorough budget can help you undertake variance analyses (i.e. actual vs budget) and can help you benchmark against rivals or other industries. Budgeting will also help you establish your critical metrics (i.e. key performance indicators, or KPIs).
By setting limits on spending, a budget helps you to control costs and maintain financial stability, which is particularly important in uncertain economic conditions. Most business owners think of costs from a profit and loss perspective and seek to slash expenses when necessary. The better approach is to view costs as the set of activities and resources required to deliver your products to market. Accordingly, you can use your budget to evaluate underlying cost drivers, such as economies of scale and learning curve effects.
A budget provides a framework for making informed decisions about investments, such as new products, marketing campaigns, or capital expenditures.
By involving all relevant stakeholders in the budgeting process, you can encourage accountability and ensure everyone is working towards common financial goals.
Rebecca is a Web Designer at BluePrint CPAs. She is a graduate of St. Clair College’s Internet Applications and Web Development Program and has worked as a freelance web designer before joining the BluePrint team.
BluePrint CPAs is a management consultancy that simplifies digital, financial and talent strategies. Our team helps entrepreneurs and their teams grow profitable and modern businesses.
Kit Moore, is an entrepreneur that simplifies digital strategy for other business owners. The team at BluePrint CPAs can assist you with web design, development, analytics, management systems and, more importantly, your overall business strategy. The toughest part of digital transformation is re-training your team - and we have pros to help with that as well.
BluePrint CPAs is a management consultancy that simplifies digital, financial and talent strategies. Our team helps entrepreneurs and their teams grow profitable and modern businesses.
Kit Moore, is an entrepreneur that simplifies tax and financial strategy for other business owners. The team at BluePrint CPAs can assist you with financial technology, tax strategies, mergers & acquisitions, succession & exit planning and, more importantly, your overall business strategy.
BluePrint CPAs is a management consultancy that simplifies digital, financial and talent strategies. Our team helps entrepreneurs and their teams grow profitable and modern businesses.
Joe is a Senior Associate, Strategy Consulting at BluePrint CPAs. He is a recent graduate of the MBA Program at the Schulich School of Business and has most recently worked for Bayer Inc and the Ford Motor Company of Canada. His experience in marketing, sales, and human resources spans various industries including hospitality, logistics, life sciences and automotive manufacturing. Joe loves working with entrepreneurs to develop their digital strategies and help them grow their business.
BluePrint CPAs is a management consultancy that simplifies digital, financial and talent strategies. Our team helps entrepreneurs and their teams grow profitable and modern businesses.
