How To Budget In 2016
As 2015 draws to a close, I’m sure you, like us, are looking forward to 2016 and what lies in store there. As a business owner, I’m constantly setting goals and planning ahead. Numbers are a vital part of any business or organization, and they’re what drive me. If you’re like me, instead of making a list of 2016 resolutions, you’re working on your 2016 budget.
The hardest part of any budget isn’t the actual creation of it; it’s the before and after that’s the biggest challenge. But that means they’re also the most important part of setting a budget.
Pre-budget: what you need to know
1. Start with current performance.
Take a look at 2015—or even the years before that. Where are you lacking? This step is one people often overlook, but it’s easy because, once again, it’s about the numbers. Look at your current numbers and performance, analytics. They will tell you where you need to spend more of your marketing budget in the coming year. Do you need a new website? Is your social media interaction falling behind? Assess where you are in order to move forward.
2. Integrate known projects.
It may be that you aren’t sure what projects or events you have on the horizon, and there will always be those unexpected things that pop up that you can’t help. But it is foolish to ignore what you know is coming up. Incorporate what you know is coming up that way you aren’t caught off guard. And don’t forget to add money toward your ability to assess and measure your success. It takes time and money to provide accurate reporting, but that’s a vital part of your success and will help you plan 2017.
3. Adjust for cash flow.
One thing that I sometimes forget when creating my yearly budget is to adjust for cash flow. Understand that your yearly budget won’t be spent equally. If you have a $12,000 annual budget, for example, it’s unrealistic that you’ll spend $1,000 each month. It’s more likely that you’ll spend $6,000 one month and $500 another, and that’s okay. But when you’re planning, keep that in mind when adjusting for expenses.
After budget: stick to it
1. Set aside time to review and measure.
Once the year is in motion, don’t let all your hard work and planning go to waste. Make sure you set aside time in 2016 to review your budget, measure where you are, and adjust accordingly. Sticking to your budget is plenty harder than actually setting it, so keep yourself accountable by having set times each month (or maybe more often depending on your needs) to review how your current situation measures up against your budget.
2. Show restraint when things come up.
It’s inevitable that something will happen that wasn’t planned for in your budget and wasn’t accounted for in your expenses. That’s okay. Just make sure you don’t throw the baby out with the bathwater by ignoring your entire budget and spending all your money. “Well, a car wasn’t in the budget anyway so we might as well buy a Corvette…” No, show restraint and don’t use unexpected events as a free pass.
3. Treat your budget like a living document.
Even with all the planning, a budget should never be set in stone. You have to treat it like the living, breathing document it is. Each month you absolutely should be shifting and working around new obstacles and challenges. Reallocation is your friend! Don’t be scared of moving money around and changing plans. It may be difficult to let go of certain things you had your heart set on, but if something more important comes up, you have to be able to reallocate your funds and move on. There’s always next year.
I hope these tips help you build a strong budget and have a successful 2016!
About the author
I'm Luke Fortin, CEO of Farmore Marketing. Originally from Turner, Maine, I achieved my Bachelors Degree in Business Administration from Clearwater Christian College in 2013. I love the combination of business and art that marketing provides--I believe it's what makes a business unique and successful.