In this second video in my series of important strategic actions business owners need to take at the end of each year, I share the important role annual budgeting plays in helping businesses grow. (Read my last post on ‘Tis the Season for Strategic Planning.)
It’s all about the transparency of numbers.
There is a lot of fear around numbers but there is also power in numbers. I sometimes need to gently push my clients to get over their fear of being transparent with the company’s numbers because there is so much more to gain than lose by doing so.
It is imperative for us as leaders to share those company numbers and educate our team members on what they mean and how they impact company decisions.
I urge my clients to create a budget for the company with their department heads, for two main reasons. First numbers empower your leadership team to run better departments and second, numbers provide clarity and a guiding force to get everyone on the same page as to how to grow.
Numbers empower your leadership team
I have seen time and again with my clients that once business owners share numbers, they don’t have to make all of the decisions in the company anymore. You can push decisions down and have your team leaders take ownership because they have numbers in front of them that outline the parameters they can make decisions within and they know the targets they are shooting for. On a daily, weekly or monthly basis they can look at the numbers and make adjustments to meet goals.
Numbers provide clarity and guide growth decisions
There is nothing like numbers to keep people on track. Within the Entrepreneurial Operating System (EOS) that I use with my clients, we create a scorecard for each individual with measurable goals and there is nothing better than numbers to keep people on track.
I have seen that when my clients’ teams embrace the scorecard – they start to obsess about these numbers and then you see real action.
If you can get the most amount of people in your organization working together towards a common set of numbers, it is amazing what you can accomplish.
Work with your team to brainstorm how everyone can work together to create MORE profitability so you can take the risks or invest in opportunities so that you all benefit. The conversation starts at the annual budgeting meeting.
Watch the video below to learn more about the importance of annual budgeting to drive growth in your business.
If you have any questions on the EOS scorecard or annual budgeting or want someone to guide you and your team through this impactful process, give me a call at 630-728-4177.
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