Budget Season Foundations: Building your “bottoms up” Approach to achieving your annual plan

Budget season best practices Part 2: Building your “bottoms up” approach to achieving your annual plan

In the first post of this series, we explored a three-step process to identifying your top down budget approach.  In this post, we will explore the “bottoms up” approach to hitting that revenue goal for your budget.

Trying to hit a 7% growth metric year-over-year doesn’t just happen magically happen.  From my experience, you need to have a deliberate approach to identifying actionable “big ideas” that can be implemented within your business to deliver your revenue growth. 

So, how do you approach finding these big ideas?  Here are a few questions to help kick off your process to revenue growth:

·       Is there a new product or service your company can launch that can provide you a competitive edge in the marketplace?

·       Are there technology or outsource solutions that can help you reduce operational costs while also improving how you serve your customers?

·       Are there ways to optimize your current marketing and sales approach to improve your ROI for every dollar that you spend?

·       Are there ways to improve your employee engagement and performance that can improve your overall revenue performance?

The goal of these questions is to challenge your conventional thinking, and to identify areas of opportunity and improvement within your business.  And with each of these questions, you have the opportunity to identify areas where you can strategically increase (or decrease) investment in the near term while growing your long-term profitability portfolio.

Now that you have identified these big ideas, apply a data-driven approach and quantify the amount of revenue each of these ideas can deliver back to your business.  

From here, it is time for some simple math: add up the revenue impact for each of these big ide of these ideas. Hopefully their collective impact are close to your top down 7% revenue growth goal.

My rule of thumb: if you achieve 85% (or more) of your expected revenue target from these big ideas, you are in pretty good shape.  If you are below that 85% threshold, time to go back and identify a few more big ideas.

By applying this approach, you have now laid the foundation for budget season.