Good planning must involve setting priorities and working on the most important ones first. (1) This is commonly called a budget or spending plan. Budgeting is essential for business prosperity (2) and to win in business, you must plan your money on paper, on purpose, before the month begins. Budgeting is like looking out the windshield (looking to the future), while using only the Profit & Loss statement is like looking at the rear-view mirror (looking at the past) while you’re driving. A budget is simply predicting the income and allocating available resources among the variety of possible, anticipated expenditures. The most common budget forecasting technique is simply using the past as an indicator of the future. Start with the same month last year or last month, add or subtract any new expectations, and the result is your prediction of the future. Every profit center within your company should prepare their own budget – and hold them accountable.

Business planning is essential for business prosperity. Businesses, like people, don’t plan to fail – they fail to plan. If you would like to learn more about business planning from a biblical perspective or how I can help transform your business using the Bible as our guide, email me at commonsensecfo@yahoo.com or call Kirk at 402-658-7340.

(1) “For which of you, intending to build a tower, does not sit down first and count the cost, whether he has enough to finish it.” Luke 14:28 (NKJV)

(2) Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty. Proverbs 21:5 (NLT) (emphasis added)

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