Mid-year reforecast – now is the time to do it
If your business has a December year-end you are not too far from half-way through your financial year. How is it going?
You might be beating your budget or falling behind, but it is highly unlikely that you are exactly on budget and also unlikely that your budget for 2012 is now an accurate gauge of business performance.
There is little to be gained from comparing actual performance against an out of date benchmark. Perhaps it is time for a reforecast?
No one likes surprises
Most successful businesses have a formal Business Plan and budget to help them to meet financial and other objectives. But four months in to a financial year the world has moved on and what might have been a reasonable assumption last November when the Business plan was being written might now be very wide of the mark.
So now would be a good time to reforecast the outcome for the year and share your thinking with your colleagues and investors. It’s also the time to make the key decisions that will help you achieve the best result you can. The longer you wait, the less impact these decisions will have on this year’s result.
2012 – not an easy year
Recent developments in the UK economy and from the EU suggest that 2012 will be a year of great uncertainty and low growth, but there will still be lots of opportunities – the UK economy is a big place.
As you prepare your reforecast you might want to think about:
- how your competitors are doing – why are the strong ones successful, can you pick up the pieces if any go under?
- whether the time is right for investment in a new product or a new geographical market
- hiring new staff or downsizing if things are not going so well
- how to fix any under-performing parts of your business and how to boost the parts that are doing better than you expected
What is important is to be aware of the state of the market you are operating in and make sure you remain competitive and successful against a backdrop of change.
Don’t spend too much time on the reforecast process. Get it done and get back to running the business. And don’t forget to do another one in September to make sure you stay on track!