How much money are you going to make next year?

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How much money are you going to make next year? Hi, this is Judi Otton with GrowthCast and we are continuing our series on budgeting and today we’re going to talk about revenue or income budgeting and I have seven tips for you. Seven things for you to think about. First of all you must make sure that your sales team is involved. They’re the ones that are actually going to deliver this revenue. So not only should they be involved, but in many organizations that I work with, they are the ones putting together the initial sales forecast which turns into the revenue lines in your budget. The second thing I want you to think about is sales seasonality. That means that certain things sell more in March than they do in December. And if you have multiple lines of business, the sales seasonality will be different. Think about a landscaper that also does snow plowing. So the way you calculate sales seasonality is you add up all the sales in that line of business for the year and then you look at the percentage that occurred in January, February March and you apply it to the future sales forecasts. The third thing that I want you to think about if you’re forecasting growth, how are you going to get there? It almost always requires something different or an additional effort or an additional salesperson or more marketing to grow your business. So make sure that you have that in mind and you’re not just going to magically increase your sales by 10%. Fourth you may want to do sales plans by customer. I worked with a food manufacturer, we did this every year. Each customer, we talked about what we had done in the past, what new products we want to get in there, and what products we can grow and then you add those all up and that becomes your revenue number again. Do that with your sales team. Fifth, something that companies commonly do is worst case, medium case, best case sales so that you know at your worst case you’re still gonna survive. Number six, you want to get buy in from your operations and delivery team. It’s great for you to sell $2 million dollars worth of products or services. But if you can’t deliver it, it’s not going to do anything for you. And finally number seven, make sure you’re tracking so that you can make adjustments. There will be a whole video coming up on tracking budget versus actual, So we will talk more about that, but just keep that in mind. I’ll be back next week with another budgeting video in your Fiscal Fitness Tips of the Week