You dread August. It is not because of the hot and humid weather, and not because your children have been out of school for too long and are climbing the walls. No, it is because August means budget season.
This year, however, you don't need to approach budget planning with trepidation. By applying the following three simple rules, you will be able to simplify your budget cycle and make it more meaningful.
Rule 1: Pick a goal. Stick to it.
Begin by choosing a reasonable and realistic goal (or goals). Once you have identified a goal, stick to it -- throughout the entire planning process. For example, if you determine your goal is to grow sales, you should measure every item in your budget in terms of how it works towards achieving that goal. Don't try and finagle items into the budget that do not touch on your goal. Non-essential items are distracting and will work against your efforts.
Note that you will likely have several goals, for example, growing sales and product development. Work through the budget, as described above, for each goal. The result will be a targeted, effective, and operational budget.
Rule 2: Don't act in a vacuum.
A common trap in the budget process is becoming Fort Knox. That is, there is a habit of developing the budget in a vacuum and then dumping it down the line. Work on the budget with your team. The more input you get, the more realistic the budget will be. Better still, by including your team in the process, they will have higher levels of buy-in and will be more motivated to implement it.
Rule 3: Question your own assumptions.
Throughout the process it is important to stop along the way and question your own assumptions before someone else does... someone like your boss. Your budget should be built on solid ground. You need to be able to show that you can justify every item in the budget based on facts, knowledge, and team input.
It is August, but it's possible to take the stress out of the season with careful planning and excellent communication.