Traditional budgeting often uses last year’s Profit and Loss figures and increase the figures by a percentage to arrive at the budgeted Profit and Loss for the next.

This ‘strategy’ ignores factors such as capacity restraints, necessary capital investments and effects on cash flow, which need to be taken into account when preparing a meaningful and achievable business growth budget.

A properly prepared business growth budget is much more than a budget, it provides answers to the business owner on ‘how to achieve my growth’. It includes budgeting for capital expenditure that may be necessary and operational changes that may need to be made to eliminate bottlenecks. Most importantly, it provides the owner with cash flow projections that ensures business growth becomes an exciting and rewarding journey and not a financial nightmare.