Profit Planning

What is your plan to increase cash flow and profits?  Do you have a road map pointing you in the right direction?

That is the role of budgets and forecasts.  Their purpose is to set realistic targets on achieving various benchmarks in your business operations.  As well, the specific action items and assumptions are outlined to achieve the benchmarks.

Your Profit Plan is for both sort-term and long-term results.  It functions as your master business strategic and tactical document.  Once created it should be used by your company to help you achieve your performance goals.  Think of it as an alive document.   It is revisited and modified as your business conditions change.

Here is the general process:

1. Verify that Current Financial Reporting is up to date and accurate

2. Discuss and determine overall company strategic goals

3. Communicate with relevant people in determining benchmarks and targets

4. Outline tactical action items to achieve targets

5. Establish team acceptance and buy in

6. Publish the Profit Plan

7. Track actual results vs plan and review variances

8. Revisit and revise

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