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Budgets & Business Planning

Introduction
This section is not aimed at the large Operator as they have their own dedicated accounts department specifically geared to the setting and control of their companies budgets and business planning. However, approximately 70% of all transport operators in the UK operate less than 10 vehicles and although they don't require the same facilities as the larger operators, they still require control of their business finance.

Whether an owner operator, or a small fleet operator, although you may not see the need for a budget, it is in your best interests to have control of your finances, especially if planning for your businesses future. Budgeting is the most effective way to achieve this and control your cashflow, as it allows you to invest in new opportunities as they materialise.
It is also the case that as your business begins to grow, you may find the need to set up seperate areas to cater for this, such as a sales or marketing department. If your business growth dictates these measures, you'll find the need to split your budget between these seperate departments, although each will be inextricably linked to the other financially.

What follows within this section is a very basic overview of budgets and the reasons for them.

What is a Budget?
A budget is a financial representation of an organisation's mission and strategic goals - essentially it is a plan translated into money and a tool for allocating resources and implementing strategic plans. A budget - be it an organisation-wide budget or specific project budget - must be carefully planned. To be effective it must also be implemented and controlled. One other fundemental aspect of a budget is that it can identify financial problems that could arise in the coming year.
In essence, a budget is about managing resources and getting the most from the resources you have available. It involves implementing resource management procedures and controls and includes managing costs and maximising opportunities. A budget can therefore:

Overall, a budget outlines what you will spend your money on and how that spending will be financed. It will therefore provide a picture of the future - defined by your plan - thus enabling you to achieve your pre-determined business goals.
A budget also provides indicators for evaluating employee performance and gives the staff goals to reach and steps to achieve them.

Budgets, Business Planning and Benefits
As a already outlined, a good budget comes from sound planning, which in turn will allow you to create a focus for the direction of your business and provide targets that will help your business grow. From this will come the opportunity to review your business performance and help identify any factors affecting your business. Sound business planning can give you:

There can be no better reason for producing a budget than the fact that this puts you in control. The benefits that come from this include (and ensure) that you're better placed to:

Further Reading
For further information concerning budgets, please visit the Business Link website at the link below.

Budgets in more depth - Business Link

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