10. November 2016 |

Good planning is half the battle.

Budget, Controlling & actual to target comparisons

 

What do you do before you take an 8-week trip to South America? I assume you read a lot of travel books, think about the perfect route, book hotel rooms and get input from friends who have traveled to these countries. You then start well prepared with all the gathered information in the long awaited holiday.

Why we should make budgets!

What has travel planning got in common with budgets, controlling and actual to target comparisons? It’s simple: you start in a new fiscal year as in an unknown land and at the beginning arise some relevant questions: Is your operation successful? Are you on the right path, to reach the result of the previous year? How will you manage to increase the contribution margin?

If you want to answer all these questions with a “yes”, than it works only with a concrete budget plan – similar to your itinerary – it has to be reachable. We will describe now how to manage this process, – because success can be planned.

The relevance of a budget plan

We are confident, that you prepare your figures every month for your accountant to receive the profit & loss-sheet on the 15th of the following month. You probably look at it briefly and think: “It’s alright!” Be honest, you do not invest a lot of time going through the results, most likely because certainly there are other operational things, which seems more important at this moment. Your employees you need as a manager and communication with guests should not be neglected either.

Many examples show that it is increasingly important to present economic objectives in the form of clear budgets. Why is that? On the one hand it motivates both you and your staff (if you live an open communication within the company) and on the other hand you are only able through establishing a budget, to compare actual with targeted figures. This is exactly what you need most. Your actual to target comparisons are your most important management tool, with which you quickly spot where you currently stand and may immediately – if necessary – initiate corrections.

Step by step to success

How should you approach your first budget preparation? We recommend a joint workshop with the respective department heads. During this meeting, the results of the previous year are presented and used at the same time as the basis for the coming budget. Plan your targets brave, but also realistic. Ask critical questions such as “Is it possible, to increase sales by 10% in the Hotelbar? Can we increase the kitchen sales by 10% -15%? “.Involve your entire management team in answering these questions. That is the only way your budget will also be motivating and be supported by all staff.

Keep thinking about your travel plan because although you might want to see all countries of South America in 8 weeks, it is not likely manage, because it is simply unrealistic And even if you actually make it to all countries, the tour is stressful and makes no fun anymore. Therefore, the trip should be planned to get out the best. Motivation will not be lost and the goals can be achieved.

We have put you in travel mood? You want to manage your business successfully in the future?

Give us a call – we will be happy to accompany you on this exciting trip!

Yours, Alexandra Truppe

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