Chances are, you’ve heard about the published 2012 federal budget. You may have even read Globe & Mail’s beautiful infographic to see what the hoopla is about. Aside from the news about the coming loss of the penny, the staggering 300-million dollar cuts to health care, and the change in eligibility to the Old Age Security pension, I did see several things I like and would recommend if you’re in the process of building your own business budget:
- There was a specific end goal. The goal is to eventually land in a surplus situation by 2015-2016 and they tailored the budget to this end. Consider what a great end goal for your budget can be. It can be having a positive net income, buying new equipment, paying off bank loans, or even going on vacation in 12 months’ time. Having an end goal can become the driving force and your ultimate motivation to keep to the budget over the long-term.
- They knew how the money flowed. The article identified what are the sources of cash inflow and outflow for the federal government. Think about the sources of cash inflow and outflow in your business. As you think of your budget, itemize your sources of revenue and expenditures. Review last year’s income and cashflow statement. Do you know whether you have sufficient sources of revenue to cover your projected year’s expenses? If not, how can you slash your costs so that your business operates within its cash inflow? Alternatively, what other sources of revenue can your business have?
- They identified key challenges. The aging baby boomer population is forcing a change in our world today and the federal budget takes that into consideration. Whether or not you agree with the change in eligibility for the Old Age Security pension and other proposed changes, these are measured responses to a key challenge in our society today. Brainstorm what are the key challenges in your business or industry in 2012. Will these key challenges require additional cash investment or outlays for your business? Consider how that will change your 2012 projections and budget accordingly.