Ava Lawler is the former MD of Weber Shandwick and now CEO of the The Possibility Partnership. In this guest post, Lawler offers her tips on ensuring your balance sheet is black and not red post the pandemic…
“Oh hell, it’s budget time again.” And what could be worse than doing a budget after emerging battered from Covid lockdowns? As chaos and confusion reigns, politicians – and probably more than a few business leaders – try to avoid making budget forecasts public, keeping the ugly state of worst case scenario planning to themselves. Wise? Well, maybe.
The best budgets can be planned behind closed doors, but the planning process ideally becomes a stage to unite a team and set the direction to clamber out from Covid lockdown industry trauma.
As leaders, it is critical that we avoid the temptation to be led by the prevailing wisdom market around uncertainty and recognise that now is the right time to set a new plan for a business – especially for your team. Sure, revenue forecasting will be trickier than it’s ever been but it’s not impossible. The budgeting and planning process presents the opportunity to paint a new picture of where the business is going and what it needs to get there.
Budgeting is a great business buddy
Budgeting and planning can support business leaders and keep you grounded in the reality of day-to-day cash hunting and cost cutting. It helps lighten the pounding heart as harsh headlines predict doomsday.
Right now, every business owner needs to be as close to their numbers as they can be. That means truly understanding sales and revenue while being laser-focussed on costs. No doubt you’ve already been through your business with a chainsaw, removing as much cost as possible – you’ve possibly had your revenue cut to pieces, too.
Looking ahead, it’s likely things could be pretty skinny – even ‘unprecedented’. Now is the time to pull apart every cost line – and all revenue, and potential revenue lines – and start building out different budget scenarios. It is critical that businesses budget for the toughest business conditions, while developing a plan for creating success.
Budget small, think big
While the budget might be small, the thinking and activity should be big. Pivoting has become the new black and businesses will be working to create new revenue opportunities. Now is the time to weave these beautiful new innovations into the fabric of your business and embed those revenue-growing creative processes into your ordinary business practices. These are the gold nuggets that will help your business work towards its wildly successful budget scenario.
Right now, cashflow is king. We are entering a new world, with new rules, and also new possibilities. As such, your modest ‘worst-case’ scenario should anchor your budget for the year ahead but accompany it with swift, responsive and continual reforecasting. The most perceptive businesses will be reforecasting weekly or fortnightly and using that planning and reforecasting to get to their ideal or wildly successful budget goals.
Budget planning is nail biting at the best of times, throw in having most of your team working remotely, and you have a recipe for team friction, which you can ABSOLUTELY use as a force for business success in the financial year ahead. During times like these we need to budget with pessimism but develop a strategic plan created from collaboration and forged with optimism. I believe it’s vital to communicate authentically with a sense of confidence and possibility during planning, and use the process to engage the team and leverage their creativity to help shape the direction the business needs to take.
While the numbers might be ruling our mindset, it is now more critical than ever to prioritise strategic planning alongside budget ruminations. Try to lift your head to see the new horizons and energise yourself and team members on the possibilities. Revisit your why, align on your values, energise your culture, love your clients and communicate authentically with optimism and promise. It might take time to find it, but a world filled with possibility is still out there – just be sure to keep some cash for when you find it!
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