I start the financial planning process using a simple financial model.
With this model, I’m looking at summary financial information, trends, and estimates to build a high-level budget.
My goal with the simple model is to avoid getting lost in the weeds of the budget.
In other words, it helps me see the forest for the trees.
The detailed, high-involvement planning of the budget will come later, but in the beginning I like to keep it simple, and see the big picture of where we want to go.
Try this in your business. Start with a high level projection of sales growth, estimated gross profit percentage, and forecasted operating expenses as a percentage of sales.
Use the simple wholesaler financial template to model out different, high-level scenarios.
What does the bottom line look like with strong sales growth, steady GP, and modest increases in expenses?
How does it look if sales dip, GP declines, and expenses are up?
The high-level planning model can help simplify your initial budgeting process and clarify top level goals.
Start simple so you can see the forest for the trees. The budget details will come later.
Do This Next
- Download the wholesaler Simple Forecasting Model and watch the video below
- Learn more about the financial training network for beer wholesaler owners and managers
