5 Ways to Nail Budget Planning and Execution in 2020
A new year means there are 12 months of possibility ahead of you and your business — but only if you’re ready to put plans into action.
Let’s leave ineffective and inefficiency in 2019 (they’re so last year, anyway) and focus on bettering budgetary planning for your best retail year yet.
If you’re not sure where to start, don’t worry. We’ve broken down 5 ways you can improve processes to make the most of your budget in 2020.
Before we begin…
If you’re ready to put plans into action, you have to have a plan in the first place! Without goals, your budgeting efforts are all for not. Before you set out on allocating funds and making financial promises, consider what you, your team, and your business want to achieve in the new year. From there, you’ll know how best to move money around to support your employees and turn goals into realities.
Ready? Let’s dive in!
1. Balance the inventory scales
As a wireless retailer, you know the pressures of keeping items in stock. With mounting competition, increasing two-day shipping options, and ever-evolving customer expectations, effective inventory management is essential to success. It is a big job with lots of details, so here’s what you should focus on first:
Virtual quantity is the value behind the most powerful stock balancing and ordering flows in your POS. It’s calculated as In Stock + In Transfer + On RMA + On Consignment + On PO – Committed on Order Entry. Learn more about managing your business’s virtual quantity.
With non-sell-able, used, consignment, and sell-able stock, it’s not only essential for you to know what’s where, but also how much of each you have in stock so you can better answer the prayers of your customers with wireless needs. These various types of inventory help you answer every shopper beck and call.
Harness retail technologies that make the most of your wireless store’s limited peg space. Drop shipping functionalities and endless aisle screens are two solutions that enable your store to fulfill customer’s wishes even if the product isn’t physically in your store.
2. Employ cautious optimism
Motivate your team in the first few months of 2020 by encouraging them to effectively pursue their metrics for success. While this team push is important, being overly optimistic about what can be achieved is detrimental when it comes to budgeting. Whether it’s the economic forces that affect your business, unpredictable consumer trends, or a new product that will influence the market, too tight of a budget won’t allow for adjustments if these factors take their toll, and your team might lose the wind in their sails. Here are a few conservative tips to help you pad the budget and protect team morale in case those pesky “unthinkable” arise:
Don’t drain the well: A reserve of cash padding your budget means that if unexpected costs are incurred, you won’t be left dry. After you’ve allocated funds for the essentials, brainstorm where the extra would be best used in case of emergency.
Know your bounds: While it’s great to think big, seeing what out-of-the-box ideas can put your business ahead, if it’s not realistic it won’t work. Employees won’t see the budget as something that can help them reach their goals and an unsatisfied staff is an unsuccessful business environment. Use previous results to drive budget decisions so your employees know these numbers are rooted in data.
3. Prioritize security
Don’t break your customer’s trust. When they come to you, they believe you’ll have the product they need, the staff to help them, and the secure system to protect their information from fraudsters
Security should never be skimped on. While there are a few areas of business that will take a healthy chunk of discretionary spending, your budget should leave enough room for improvement, maintenance, or revision of your current safety and security protocols. Robbie Sinclair, Head of Security at Country Energy, NSW Australia, said that “security is always excessive until it’s not enough,” and anyone who has had a major breach knows this all too well.
Your customers expect that their payment data, personal information, and shopping preferences are kept in the strictest of confidence. In 2019, Norton reported that there were 4 billion records breached before the year was even over. Viruses, thieves, and scams don’t discriminate; individuals, businesses, and government agencies have all been affected. Without the right funds to beef up your protection, your business will not be immune.
4. Visibility is number one
If you keep your well-planned budget to yourself, chances are you’ll have issues in future quarters down the road. Your team likely has a few different roles with budgetary responsibilities and without knowing what they’re working with two things may happen:
They’ll overspend and you’re left picking up the tab.
They’ll under-spend, leaving potential customers out on the table for competitors to gobble up.
The secrecy isn’t worth it!
While some areas of the budget are for certain eyes only, the plan at large should be distributed to everyone that it affects. Not only will staff feel that they’re a valuable part of your team, but all eyes on deck will also ensure better communication and more efficient and effective feedback.
5. Stay the course (-ish)
Throughout the last quarter of 2019, your team was hard at work making predictions, educated assumptions, and strategic plans for the next 12 months. That’s great! But have you ever known a plan to fall into place without any hitches? Me neither.
If you’ve adopted points 1 through 4 into your budget for the year, you’ll be well on your way to seeing success. But even the most well-plotted plans may need to switch lanes to avoid impediment. Using your goals and metrics as your business’s North Star, you can make adjustments to keep things on track if need be.
While the steps of strategic planning are used in the development of your budget, they can also be used to ensure your plan is adaptable if things don’t go exactly as planned.
Step 1: Remember your vision. Know what you’re working towards on a personal, team, and organizational level. This will make every decision you make one that works towards your quarterly key performance indicators.
Step 2: Lean on what drives you. It’s imperative to understand what keeps you working towards your goal when the times get tough. Use it to understand how far off your blueprint of success you are, and how you can get back in line.
Step 3: Gap isn’t just for jeans. Continue to analyze what’s missing between where you are now and where you want to be. This will make or break your success.
Step 4: SMART goals, all caps! SMART stands for specific, measurable, attainable, realistic, and timely – things all your goals should be. That way you’re setting up your team for success right from day one and you’ll know how you can get back to achieving what you set out to do.
Step 5: Monitor, measure, revise. There’s no point in having goals if they’re not going to be worked towards. Monitoring results isn’t about seeing what’s failing as much as it is seeing what can be done differently or improved. Lots of the time, you won’t have a set of instructions that leads your business from point A to point B. Keeping track of what works means you keep moving forward and this monitoring should be constant. Mark every movement and make it happen.
Putting it all together
The five tips above will help you jump into action as you execute on your wireless budgeting plans. Adapt them to fit you needs, anticipate challenges, and keep your targets and ambitions in mind, and you’ll reap the rewards.
Looking for a solution that can help you run your wireless retail business? Find out how iQmetrix can help you better reach your targets and grow your business well into the new decade.