A business budget can be a powerful tool for growth, if prepared and used right. Unfortunately, too many businesses don’t prepare one, and many of those that do get it wrong. Although a budget is made of numbers, it shouldn’t be just about them. A growth-generating budget is the monetary expression of a proper growth plan.

If you have started preparing your budget for 2025, please stop and read this first. The common approach to making a budget is “let’s take last year’s, add x% to sales, the proportional % to costs and try to reach it”.

While this approach sometimes works (especially if the X is modest), it cannot achieve ambitious growth.

For a business to grow it needs a plan first. The budget will be the financial expression of the growth plan, and a way to measure it.

For a growth plan to work it needs to:

• Keep the long-term goal in mind. How will business success look like when it comes? It will probably not be next year, but what you do next year needs to be in the general direction of this far away goal.
• In line with your values. This is almost self-explanatory, but don’t plan to do anything that doesn’t sit well with you.
• Based on your current position. What are the problems you need to fix, and the opportunities you can exploit in 2025?
• Identify boosters. What are the most impactful actions you can take in 2025 that will yield the best and fastest results?
• Have an execution plan. What are you going to do each quarter? In what sequence? What will you do next week? Who is going to do what, by when?
• Be monitored weekly, monthly and quarterly. The world is too dynamic to assume that what you know today will be 100% true in 6 months’ time.
• Be inclusive. This is not something that the CEO and the CFO do by themselves (unless they are the only ones in the business…). Get your team together, discuss all of the above, agree goals, and assign them. You may be surprised by the ideas that come from your team and will certainly create enthusiasm and commitment that will drive the plan forward.

Remember: a properly prepared and executed budget can transform your business.