Do You Forecast?

It surprises me sometimes how few business owners use forecasting in their business planning process. Forecasting is really a starting place to talk strategy around. It’s an easy area to systematize because the fundamentals of how you do it never changes. It’s really more a matter of learning how to do it, and for that you do not need to be an MBA.

In bookkeeping and accounting we have this thing called the chart of accounts. It tells the bookkeeper how to organize your information, and it should be designed by the owner. Take a look at yours and see if it is set up in the way that makes sense to you. This will allow you to extrapolate data from your accounting system for various reports you will need to analyze your business.

Each year, you should have a planning and budgeting session with yourself and your key people. Typically, you would start at the beginning of your final quarter. Set your budget and review it every quarter for lessons and changes. One thing you can count on is that business is always changing so you want to change along with it, but try not to second guess your strategy between quarters.

Make sure you develop a good relationship with your accountant and bookkeeper, but remember that you are in the driver seat – so do not abdicate your responsibilities in this very important area. You should know what questions to ask them, and generally what they are doing for you in order to properly set your expectations.

Enjoy your final days of summer, and I hope you have a great plan for the fall.  …Coach Clint