Are You Guilty Of “Business As Usual Budgeting?”

by Marilyn Wilson on August 23, 2017

Bugdet Planning

How many of have been informed that need to spend the rest of your budget or its going to be reduced next year?   How many times have you blindly hit copy and paste and then added a bit for inflation and an unexpected project and then called it a day on your budgeting process?   If you’re walking somewhat blindly through your budgeting process then you’re practicing what we call “business-as-usual budgeting”. What’s that? Well, if your typical budgeting practice is to look at last year’s numbers and think, “OK, I spent $X on technology, salaries, support, IT and marketing this year. Let’s add 3 percent and call it good to go,” then you are, in fact, engaged in business as usual budgeting. And maybe this is the year you should admit it and reform yourself (and your budget) Business As Usual Budgeting Is Very Dangerous.  If all you’re doing is looking at last year’s expenditures and adding a little bump to each, then there’s a high likelihood that you may be spending money on some things that just don’t make sense anymore. You’re locking up dollars that could be used for more important items that you may be ignoring. Brokerages, Associations and MLSs are under attack today. There are tons of people that would like to see you simply go away so they could take over the industry. If you’re going to remain a leader for the long haul, you need to think fundamentally EVERY year about where you’re spending your money and WHY. Do You Have A Strategic Plan? Have you completed a strategic plan this year?   I don’t mean a business plan. I mean a deep, fundamental look at your businesses strengths and weaknesses – opportunities and threats.  If not, then how do you know where you’re going and what your key priorities are?  If you have not done a self-examination of your business then it’s going to be VERY difficult to build a benefit-based budget. Tie Your Budget To Your Strategic Plan If you have completed a strategic plan, then your budget should line up side by side with the key priorities that you have outlined. Make sure you set aside budget and resources to pursue every strategic goal with vigor – even those longer-term, less well-defined and scary ones. After all, there is no time like the present to pursue your larger dreams as a company. […]