Have you ever felt frustration as you try to plan your company's performance for the next twelve months, only to suffer even greater frustration when you try and measure your actual performance to that plan? The source of that frustration is usually a common issue small and medium-sized businesses (SMBs) experience. You see, SMBs are even more volatile than larger businesses, and the assumptions made in the forecasting process are even less accurate and more likely to change during the twelve-months for which you are planning.
In my recent American Express OPEN Forum article Why You Should Reconsider Your Business Forecasting Strategy, I give some tips on how to use a rolling forecast/budget to overcome this issue, which will ultimately help you make your business more successful. It requires discipline once per month or quarter to update your projections based on everything you have learned about the assumptions you are making, but you'll get so much more value from the efforts you take to plan and budget. A static budget just doesn't make sense for SMBs.