3 Financial New Year Budget Fails and How to Avoid Them

Probably even more so than the start of the year; the start of the financial year should bring with it the chance to start again.  What happened between 1 March 2021 and 28 February 2022 will soon be gone forever and you need to bank the learnings and move on… quickly!

1.    The Review Mirror is Smaller than the Windscreen for a Reason

Whilst a rearview mirror in a car is an important reminder of where we’ve come from, and the odd glance can very well save us from a catastrophe creeping up on us, it is for very good reason, much smaller than the windscreen.  The bulk of your time, energy, and focus should be spent on looking through the windscreen into the future and only occasionally glancing at the rearview mirror. 

Set very clear goals and financial numbers to hit by the end of February 2023 and START by casting in stone your PROFIT goal.  You then work backward from there.  Business is about profit and ensuring a return on investment so don’t let the past dictate what the number should be.  Fix the profit target and go about focussing on the future to reach it.

2.    Change your Reality to Meet your Goals

Too often we change the goal to meet the reality. Stop it!  What if you couldn’t mess with the goal and had no choice but to reach it?  What if it was a matter of life and death?  If the consequences were high enough you’d reach the goal irrespective of the current reality.  If I stole your child and held them ransom until you achieved your goal you would most definitely find a way.  So FIND A WAY for 2022!

Make the consequences of not achieving your goal worse than any curve ball you could encounter during the year.  If you get behind, which you probably will at some stage in the year, make sure you double your efforts to catch up and get ahead.  Don’t just bank the loss and bring down the year-end goal.  Every period, whether monthly, quarterly, weekly, or even daily needs to be hit and be on a budget otherwise the efforts need to change to make up for it.  And there’s a tip in itself.  Make daily goals that are a lot easier to manage and correct on the fly than when you’re behind after a month or a quarter. 

3.    The Devil is in the Detail

Gut instinct and experience are important tools in making decisions as an entrepreneur but don’t confuse that with the ‘thumb suck’ decision-making method.   Collect data and information to inform decisions and don’t rely just on the ‘thumb suck’ method.  You, therefore, need to work harder on testing and measuring everything that you, your staff, and your company do.  The smallest details, when influenced at a micro level can have a profound impact on the ultimate result. 

Here you don’t necessarily need fancy expensive IT solutions.  Good old pen and paper and basic spreadsheets are plenty to gather information and roll up into basic yet vital reporting.   Make sure the year ahead is influenced by the data and act quickly and decisively on moving forward step by step.

It’s almost a new business year.  Treat it as such.  Reinvent and reenergize and whilst you’re working relentlessly at achieving your goals make sure you have some fun in the process.  Always remember YOUR business is YOUR chosen vehicle to serve YOU! 

If you’d like help with setting your goals alongside other like-minded business owners make sure to join us at our next quarterly planning session. Click here for more information.