I write a budget every year. I never used to. Never had time, found it boring and thought it wasn’t that valuable to be honest. After five years of creating a budget for my business and personal life, I am a budgeting fiend. I demand them from myself, my staff and at home. One of the main reasons my younger self avoided budgets was that I thought they were too restrictive, I wanted to go with the flow, be open for opportunities. Now a little older and a little wiser, I wish I could slap my younger self, here is the truth about budgets and the budgeting process.
1 – They are the northern star of your life or business
When you are faced with the task of developing a budget, you are forced to think about the future. You need to make a plan and make some assumptions about how that plan can be achieved. It brings a degree of clarity to what you and your team’s goals are. Most importantly, it gives you something to track against. I review my budget monthly. I look at what happened last month, what’s coming up next month and adjust my future predictions accordingly. My process is now much simpler than when I started out. My business plan is a lean canvas, a list of projects and a set of targets. It is not more than four pages, and it works for me. Whenever I am contemplating an unplanned project or opportunity, my budget is the first place I look. I do what-ifs to assess whether or not to stray from my budget? It is central to all of my future decisions. So next time you’re thinking of a new member retention strategy to boost your fitness business, you’ll know what you can and can’t afford.
2 – Budgets give you flexibility
As I said before, I used to think budgets were restrictive. The truth is, they give you options. Can I afford to upgrade my equipment? If I invest in that marketing activity, what am I expecting to happen on the revenue side of my budget. The point of the budget (and tracking against a budget) is that it shows you what is possible when you are presented with an opportunity or would like to change something within your business or life.
A case in point, after years of scraping around in my previous business, we started making a little bit of money. My family wanted to go on a holiday that would take me away from the company for a few months. If I did not have a budget, I would not have been able to make the decision that allowed me to sleep at night. Once I made a few recalculations in the budget moving forward, I worked out I could employ someone (quite comfortably) to manage the business on my behalf. I didn’t have to guess, and I didn’t have to worry.
3 – Budgets & business goals go hand in hand
I know companies that have their budget and business plan in a single spreadsheet. These are large multi-million dollar operations. Every budget line (both revenue and expense) contains notes on the assumptions that underpin the number. When the two things are so tightly linked, you can quickly make changes if (a) your assumptions are proven incorrect, and you need to update your budget or (b) you are introducing a new plan (with assumptions) and they need to be considered in the context of the budget.
Never put together a budget before?
Happy Planning! And remember, for more great tips, check out our blog!
Who is ClubWorx?
ClubWorx is a fitness member software provider assisitng Personal Training Studios and Box owners grow their businesses. As a ClubWorx customer you can:
- Manage your prospects,
- Track Attendance,
- Manage Memberships,
- Collect automated payments,
- POS, and much, much more!