Time To Draw Up Next Year's Budget For Your IT Solutions Provider? Remember These 5 Tips

By Rick Delgado, contributing writer

A budget plan is crucial to any services provider preparing to take on the New Year, and while the concept alone may seem simple, many organizations dread the task. The entire process can become a complicated system of predictions and forecasting, with time consumed by assessing all the current expenses as well as expenses of the past. However, with a few tips and tricks in mind, the process can be both easier and more accurate, resulting in less stress and greater profits.

If it’s time to draw up your budget, be sure to keep these five tips in mind:

1. Follow Every Thread. While being overly detailed can lead to inflexibility and restraints, being precise on what you need when drawing up a budget is crucial. By following the expenses to their roots, you are better prepared to justify the costs and avoid conflicts that could lead to your budget needing redesign. Additionally, by nickel and diming the expenses of your organization, you can determine what’s really valuable and what’s useless dead weight. You may be allocating funds to software licenses and machinery that, under closer inspection, could be replaced with something more effective to boost productivity. In that same way, discovering the true assets allows you to avoid buying new equipment that, while nice, isn’t necessary.
2. Plan For The Unexpected. You may have detailed forecasts set out to determine the amount of funds your organization should need for the year, but there will always be surprises. Some of these surprises come in the form of disasters. Perhaps you’ll encounter a surprise act of God that puts your servers and hyper converged infrastructure down for the day, forcing you to scramble in search of replacements or substitutes for the time being. Perhaps an office accident leads to damaged equipment that needs repairing. Rather than finding yourself behind the eight ball, going into debt or not having access to what you need, by having an “emergency fund” accounted into your plan, you can be assured these issues don’t lead to irreparable damages.
3. Don’t Be Overly Optimistic. While overestimating to account for surprises is important, overestimating in general can lead to even more disasters. Perhaps last year brought it fantastic revenue, and forecasts predict that this coming year will be met with even more success. With this logic in mind, you should be able to afford a greater budget and more expenses, right? Now what happens when damages to equipment, late payments by clients, low seasons, and other complications lead you to not meeting that goal? When drawing up a plan, it’s important to be realistic and even underestimate the profit you’ll experience. This ensures that, if the best happens, you can enjoy the rewards, and if the worst happens, you’re prepared.
4. Budget With Seasonal Changes In Mind. No matter the industry, every company experiences seasonal changes. Perhaps your niche has great success in the summer months or over the holidays when your target audience is most interested in what you have to offer. Perhaps it suffers in the other months and revenue declines. If a surprise incident arises during these low months, you’re in trouble. By planning for this lull in business and including it in your budget, you can be assured the funds will be in place to avoid disaster.
5. Consult Others. Include multiple people with varying roles in the budgeting process, so you can benefit from a fresh pair of eyes and unique insights in drawing up your budget. Be sure to ask experts from marketing, accounting, and the like for consultation on how to structure the coming budget, including what strategies they have in mind for their own divisions. This allows them to catch oversights or offer advice that only someone in their specialty could offer.

Drawing up a budget can be both stressful and difficult, especially with the chance of miscalculating and finding yourself in a bind in the future. By keeping these tips in mind as you handle the task, you can ensure efficiency and greater results, taking on the next year with confidence.