In past days, I left my house early for an appointment and without realizing it, from one moment to the next, the road was filled with a dense fog that made it practically impossible to drive, this forced me to slow down (almost the same as if you were walking), also, to turn on parking lights and pray not to have an accident. This is exactly what happens to a company that lives from day to day, without having a short and long term budget.
Having a clearly defined budget by cost/expense line is critical to the success of any business, as it provides senior management with an up-to-date picture that facilitates decision-making and encourages business growth. In addition, it prepares the company to face possible changes that may arise over time.
The pandemic has affected thousands of businesses around the world and it can be said that there is no economic activity that has not had an impact due to this. Now, companies that did not have clearly identified their budget items, which costs or expenses were fixed, which variables, where adjustments could be made, suffered even more or were even forced to close, they were driving with such a dense fog, that forced them to stop their business… for how long? For some it was definitive. For this reason, I invite you to dedicate time to this important topic, take some time with your accountant or your financial advisor and make a budget for your business, it will be of great help, it will be like having the most powerful headlights that will allow you to drive in the middle of of the denser fog, it is possible that, if you have to slow down, but you will have more certainty of the actions you must take.