Strategy Planning and Budgets

Now is time to talk about the taboo subjects – Strategic Planning and Budgets.

Why is it taboo? Well, there are a number of reasons like the following;

  • I don’t know where to start
  • It will cost me
  • It requires effort, time and thought
  • I know my numbers and they are heading in the right direction anyway
  • There is no value in doing it

It is like anything in life, if you don’t plan and do the necessary steps, you won’t get there.  No different to the challenge of losing weight or putting muscle on, there’s always essential components -the goal, the exercise and the diet.  To do any one of these is not enough, you need the full combination to achieve what you are aiming for. 

I love the saying’s “Aim for the moon.  If you miss, you may hit a star” and  “If you aim for nothing then you will surely hit it”.

Another director at CooperAitken often reminds us that we only have so many working days left in our life, I can’t remember his exactly, but if I did it for myself it would look something like this.  I would have only 3,440 working days left to make a difference for my family and retirement.  Only 28% of my time left to achieve some goals.

We at CooperAitken have a real focus on working alongside our clients and planning for the future.

The first step is understanding what your goals and future looks like and this changes at each stage of your life. Simple at the start when you are single, a little different when you have a partner and then the next change when you have a family or want to do something for others.

It does not matter what you are doing for an income or how you are getting an income, but it does matter what you do with it.

Strategic planning is not just about dollars but also focuses on the other areas you want to achieve in your life like work-life balance, supporting the community and the greater family, doing something for your industry and helping out the environment.

Wealth and a higher standard of living comes from doing those hard yards, it does not come to us on a plate and if it has turned up, it still needs to managed because it will disappear quickly.

Key elements of Strategic Planning are:

  • Understand your external environment
  • Complete a SWOT analysis of your internal organisation and external environment
  • Involving the key decision makers/Shareholders/Directors
  • Understand what the future could look like
  • Consider the opportunities and how you can use innovation and technology
  • Understand how and what you need to execute the strategy
  • Wrap dollars around the financial value of the strategies
  • Plans need to be flexible
  • Where possible use data to substantiate the strategy
  • Make sure there are actions
  • With every action you need to know the measures to know if you are succeeding or not
  • Produce a 1 page high level plan so it can be looked at on a regular basis and can be shared with the wider team

Once you have a Strategy and a Vision of what you want to achieve then one of the other areas you focus on is budgets.  The budget helps to show the likely impact of your strategy.

Budgets need to be dynamic and looking at more than the year in front. They should extrapolate the likely outcomes for the next 5 – 10 years at a high level.  They need to reviewed regularly and updated as things change.

The budget is the tool we use to hold ourselves accountable to the strategy.  If we can achieve budget or close to budget then it will allow you to carry out the strategies and goals you want to achieve.

Compounding works.  If you put a $10 per week aside and you get a 5% return on your investment, at the end of 25 years you will have $26,059.  Not bad for putting aside $10 per week.  If you changed it to $100 per week, then it would be $260,590.

Take the time to do a budget and now is the time to do it. Start off a new financial year or before your next financial year begins.  Work with your team of advisors.  Let’s work together to achieve your goals with the help of CooperAitken.  The benefits will outweigh the costs.

Act now to make a difference to your future!

Peter Hexter

Director and Chartered Accountant

P: 07 889 7153

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