How to best manage your budget to invest in the resources you need to grow

Use your past budget to analyse what your successes and challenges were. Otherwise, how can you adjust if your plans are not leading to the results you want?

The new year is the perfect time for businesses to reconsider how they budget. Considering the growing impact that the Omicron variant is having on the business environment, companies are still in a precarious position. Therefore, effective cost management is more significant than ever when seeking to make your business more robust. Tim Barber-Lomax, business development manager at Expense Reduction Analysts (ERA), explains how to best manage your budget, highlighting why there is a stronger market need than ever for B2B solutions.

To move forward, you must look back. Use your past budget to analyse what your successes and challenges were. This gives you a valuable starting point to ascertain what your future budget implementation will be. That starting point is what you’re going to then build on to achieve more in future years. A huge part of this is learning from last year’s story to create a better plan for 2022. This is a vital part of any good budgeting strategy – analysing performance insights so you can create a flexible plan that you can construct and adjust each year.

Review, review, review
Budget planning is not something you should do once in the new year and then file away. So, when you have finished this year’s financial planning, keep it going. Be active so your budget is alive and in your business. Do this by taking time out of each week to assess your progress, plan for the future and invest in the resources you need to grow. Otherwise, how can you adjust if your plans are not leading to the results you want? This may seem like a tough undertaking but without the necessary effort, your budget will not have the desired impact on your business. A recent industry survey by Deloitte highlights the continued need for impactful budgeting – with a record high of CFOs (81 per cent) expecting increased operating costs. This has also been supported by our latest white paper where a large majority of surveyed executives believed maintaining a high degree of cost discipline over the next 24 months will be critical for growth. It is never too late to make the changes required to make a difference and when support is needed, outsourcing can be a valuable tool in this change.

Collaboration unlocks business potential
As a business owner or leader, you cannot be an expert in everything. Search for partnerships that will make a difference to your business. Evaluate where you think there may be gaps in your business expertise and take the required steps. It is sometimes hard to accept that you cannot do everything yourself. However, in my experience, collaboration is vital for success in business. The ongoing shortage of labour is creating increased pressure on business environments. Therefore, finding partners you can trust is vitally important in creating a sustainable business model.

Cost optimisation partnerships are another option for your budget considerations. More than simply cutting costs, it is a viable extension to your long-term business strategy. Cost management services offer a route to optimise your business’ services and processes, while also creating sustainable cost savings. This comes from delegating to consulting experts who offer insight on how to streamline your systems when the changes may not be obvious. For example, working with SYNETIQ, we completed six projects delivering £150,000 of annualised savings with more to come. We also consolidated suppliers by reducing the number from 35 to seven across all projects reviewed – imagine the control and efficiencies going forward dealing with 28 fewer suppliers!

The author
Tim Barber-Lomax is business development manager at ERA, a multi-award-winning network of cost reduction consultants delivering value through insight. His role is to broaden ERA’s capacity to assist clients by growing their network of consultants, developing new services and building relationships with complementary third-party partners.