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Growth Through Profit Planning
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Profit Planning
Future profits are a result of the decisions you make today. The tool used in this decision process is a business budget. Based on your business' proposed growth curve, your profit plan strategy can be expressed in terms of this budget. Keep in mind, a budget is simply a restatement of your operating plan showing the financial impact of the managerial decisions you make. Here are some different types of budgets you may not be familiar with.
If long-term planning is generally strategic, setting goals for sales growth and profitability over a minimum of three to five years, then budgeting can also be defined as short-term planning.
Businesses often use special types of budgets to assess specific areas of operation. A cash flow budget, for instance, projects your business's cash inflows and outflows over a certain period of time. Its main use is to predict your business's ability to take in more cash than it pays out, which could mean the difference between success and failure.
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