HAVE YOU PLANNED FOR YOUR FUTURE?
Do you plan to work until you die, or are you planning to retire? Where are you going to get the money to retire? If you are a business owner you are depending on your business to achieve your personal financial goals.
When you retire do you want to play golf, go fishing, travel, or sit at home because you can not afford to do anything? How you spend your retirement will depend to a large degree on how well you run your business now.
Planning is the same as budgeting. "Budgeting" seems to have a bad image. However, when you are budgeting you are making plans for the future.
Whether your sales volume increases, decreases or stays level, if you are making wrong financial decisions because of lack of planning and inadequate information you will not survive. We don't know of any retailer who intentionally plans to operate at a loss. However, we do know of many who, when asked what they plan to do next year will say:
a. "I don't know, but I hope to do better than last year."
b. "I'm planning a 15% sales increase."
c. "Who's got time to plan?"
Our answer to these retailers is:
a. Profits are not based on 'hope'.
b. An increase in sales volume does not guarantee a profit.
c. If you want your store to be profitable, you must make time to plan.
A retail budget or plan should contain certain elements:
Annual Gross Margin Plan, by classification
Open-To-Buy, at company level for the 12 month period being planned
Budgeted Income Statement, by month
Cash Flow Projection, by month
If you need help with this project, let me know. I have worked with scores of retailers on this project and can lead you through it with the minimum of time and effort on your part. The important thing is to JUST DO IT