If you haven’t already started, now is a great time to begin planning for next year. It doesn’t matter what kind of business you’re in; there are things you can do to affect the path and destination of your enterprise.
I’m a firm believer in zero-based budgeting. That doesn’t mean we have to throw away all of our historical data and start from scratch, but what it does is make sure we look at each line item in the budget and give thought to how that line might be different than in previous years.
At Red Wing Software, we know there are some constants that we can count on being relatively stable from year to year. In our case, labor is one of those constants, since we enjoy very little turnover in the fine staff we have assembled. In other areas, for instance marketing, we might make adjustments to the number of trade shows we attend, or the size or placement of ads. We spend a fair amount of time analyzing the major line items to see how we can reduce costs without affecting quality, or increase market share of a particular product, increasing revenue.
Examining every line item when budgeting expenses or projecting revenue (and then regularly comparing actual results to that budget), helps maintain better control of the business throughout the year.