Budgeting for New Revenue

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From the video...

As you know, it’s budgeting season. Last week, we discussed how to plan for the revenue you already committed this week. I want to talk about planning for new revenue in the new season. My first suggestion to you is be fairly conservative because this is going to be your budget. It’s great to exceed it, but you don’t want to have your wildest dreams and then plan your spending based on that. This is also a great reason to do different scenarios. What happens to your business if you have no new revenue next year? What will you need if you meet your wildest dreams and goals? And maybe a middle case, that’s that kind of conservative case.

Second, make sure that you’re including any costs associated with getting that revenue. What does it cost for you to acquire a new customer? Will you need more marketing initiatives? Will you plan on going to a conference? How are you going to acquire this new revenue?

And then finally, looking at all of the revenue that we’ve planned for the next year, make sure that your cost of goods sold and your staffing needs match up with that are sufficient to fulfill that revenue, whether it’s, you know, product that you need, additional folks, space, whatever you need to fulfill that new revenue. So that’s it on the top portion of your budget. Next week, we will start talking about how to budget for your expenses. I’ll be back then with a new Fiscal Fitness Tip of the Week. And if you want my budgeting template, reach out and I’m happy to share it with you. This is Judi Otton with GrowthCast, and I’ll see you next time.

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