Looking Forward:
How Can You Increase the Likelihood of Greater Success in 2012?
Considerations in developing a business plan and budget
By David Rosenfeld, CPA - Nperspective CFO Partner
 The end of each year provides a CEO/business owner the opportunity to review how the company performed during the current year. Normally this assessment involves comparing budgeted results to actual results on the P&L. There will always be differences to the budget, so the question for the business owner is to understand why those variances occurred and can those variances be moved in a positive direction. After analyzing the current year performance, we need to start looking forward to the upcoming year by developing a set of goals and objectives the CEO/business owner hopes to accomplish. These goals are not purely financial numbers, although the end result should be a financial budget for the new year. Some of the goals and objectives you establish may be strategic - acquire a company, add a product or service line, or expand to a new market. These strategic goals may take longer than a year, but if that is the strategic goal, you need to develop a non-numerical plan of action required to achieve each strategic goal. If you want to expand your product line, you need to know what is required in terms of development and manufacturing capabilities to achieve this goal. Also, you want to make sure that your sales and marketing group is prepared to market the new product when it is available. All of these efforts will require some amount of labor expenditure which you should incorporate into your annual business plan. Some of your goals and objectives will be more tactical in nature, such as improving customer satisfaction, shortening delivery time, or growing revenue by 10%. As you look at these shorter-term objectives, you should develop a plan of action to accomplish these tactical objectives (similar to the strategic objectives, but these should be achievable within a shorter time frame). If you want to improve customer satisfaction, you have probably already identified certain issues the customers have with your product or service. Work with the customer service and delivery teams to identify options which improve the customers' perception of your company. Understand the costs and benefits of these options and choose which improvements will provide you with the best "bang for the buck." If your goal is to grow revenue by 10%, how will you accomplish this - increasing the size of the sales force? Increasing the sales force's productivity? Or providing more market awareness of your company and products via advertising & marketing? Each option to grow revenue has costs and benefits, and your goal is to choose the option with the greatest probability of being successful. As you go through your assessment of your strategic and tactical goals, you should also review how each of your teams performed during the year. Are there opportunities to improve each group's performance - training or automation tools may be cost effective ways to successfully grow your team and your company. As you complete establishing your goals and assessments, compile the results and create your financial business model. When you complete this compilation, you must determine if this preliminary budget meet your financial goals (both income and cash). Often your financial goals will not be met with this preliminary budget - but now you can re-evaluate each strategic or tactical goal, and determine the priority of each goal (remember - the money you invest in achieving a goal is an investment so you want to maximize your return on investment). Through this prioritization, you can adjust your company's budget so that your financial goals are accomplished as well as the most critical strategic and tactical goals. The end of the year is the great time to assess your organizations performance. You can review how the goals you established at the beginning of the year were achieved and the success of those goals. As CEO/business owner, you then can look forward to the next year with a great understanding of your company's current performance and set the direction for the upcoming year. With a well thought out plan, you can motivate yourself and your team, and create the greatest opportunity for success. Nperspective helps many companies improve their success by assisting with their budgeting and financial analysis. Please contact Janet Watson at (813) 317-3460 or jwatson@npcfo.com for further information or a free consultation. | 
