Resource Center - Industry Articles
The Budget as Your Profit Plan
by Terri Norvel, September 8 2009
I'm on a mission and I want to invite you to join me. It's all about creating value and making money.
It's time to start living with your new budget for the year. While I can't think of any specific leaders, managers or owners who actually like the annual budget creation process, it's truly an essential business tool.
So let's start calling a budget what it is: a plan to make a profit. A Profit Plan. So let's rename it for the record, right here and now. Why? Well, think about it, the word budget has some negative connotations. What comes to mind? Perhaps limited allotments, fixed resources, unrealistic expectations, and/or confidential information for only a chosen few. Quite frankly, budgets get a bad rap. Too often it's "I have to make my budget numbers or I don't get a bonus." Nothing empowering or energetic about this.
Yet the truth is, a good Profit Plan sets you and your team members up for success. To begin with, a Profit Plan requires a bigger picture thought process and a comprehensive analysis of the business so that you now have specific agreed upon direction and a performance road map in advance. Add that the Profit Plan aids everyone in good decision making for appropriate actions on a daily basis. And, it provides the opportunity for acknowledgment and rewards throughout the year. All good reasons to cherish this tool.
How about a fresh perspective as you move into 2009? Use your Profit Plan for you and your team to drive profits and profitability! Here are some important actions:
- Bring your Profit Plan out from behind a closed door - transparency is a critical trend today, what's to be secretive about?
- Educate your entire team about the Profit Plan - use judgment on confidential info
- Talk your team through your assumptions and how you arrived at the final numbers - information is empowering
- Teach each team member how they specifically add value and make the numbers happen - knowing why and how they fit into the big picture is motivational
- Educate on expense control - why it's important to turn off the lights when you leave a room (yes, start with the basics)
- Talk them through specific examples to present the numbers visually - have them picture how they each create profit dollars
Rather than feeling limited by your Budget, embrace your Profit Plan as the pathway to your bonus. Then use your Profit Plan ongoingly! As situations come up throughout the day, use it as a teaching opportunity that relates back to the Profit Plan. As the saying goes, ‘money flows where attention goes.' Make sure all of your team members understand the importance they each play in the Profit Plan realized!
For more information contact Terri at Tel: 303-439-0077 | cell: 303-475-5456 | fax: 303-439-2466 or visit www.MultiFamilyPerformance.com Terri Norvell <INSERT LINK http://www.naahq.org/blog/Pages/NorvellTerri.aspx- Consultant, Speaker, and Trainer, Multifamily Performance
| MultiFamily Performance | Situational Specialist
MANAGEMENT Blurb
Property management expert Terri Norvel shares more than 25 years of property management experience to give you proven tips to turn your budget into a profit plan. Read her article:
