Be A Dreamer, But Have A Plan of Action

Aug 15, 2013

A good friend of mine told me a story about how her four year old recently said a swear word. My friend was in her closet getting ready, and her little girl said, “what the hell is mommy doing!” My friend said it took everything she had to not laugh at her daughter and then told her that was not nice and that they do not use those kinds of words. She told her if says that again she will get her mouth washed out with soap. I almost feel like I am just like that little girl tempting fate and getting my mouth washed out with soap when I said the dreaded word…BUDGET. A colleague from another CPA firm that we have worked jointly with said they needed assistance with writing an article about budgets. He used a quote stating “those who aim at nothing, tend to hit their mark with incredible accuracy.”

In this article, Jim talks about establishing your goals and then creating your budget from those goals. He also spoke about using that budget as a measuring stick for determining your achievement of your goals. I think that is a really great way to think about it, what other things have you done when developing a budget?

For me, being very specific is essential when developing a budget. It is alright to have big dreams and goals, but define specifically how you are going to achieve them. For instance, if your goal is to increase sales by 3%. Then say how you plan to do that. Meaning, I plan to increase sales by 3% by expanding my marketing efforts which will include attending a seminar and developing five new leads. It is very important to have an action plan in place detailing how you plan to reach that goal. Your action steps may not work as well as you had hoped, or they may even work better, but the key is having a plan. Without a plan it will remain a dream and a goal, but you will only achieve it by dumb luck.

As I have said before, if you do not have a budget you do not have a lot of guidance to know when things are going astray. If you cannot determine or know what should have been, then how do you know when it things are gong awry? Anything can seem correct when you have no base to compare it against. It is very crucial to have a budget, more importantly a meaningful one that doesn’t exist to purely say you have one.

So as Jim said, close your eyes and start dreaming, just make sure you have some action steps too!

Categories: Cost Accounting