Working the budget
Each year at budget time (January or February for the pool and spa industry), you can determine what is needed to achieve your sales goals for the current year. For instance, this may include an increased labour force, new equipment (to replace older equipment or expensive labour) and any new overheads needed to manage and control these new changes (e.g. new sales person, increased insurance on new equipment or a new supervisor to manage the additional workers).
After determining these costs, your budget is fine-tuned until it is manageable and you feel it is achievable and necessary for the profitable growth or existence of your company.
It is your responsibility to review the internal financials of the company—either weekly, bi-weekly, monthly or quarterly—and compare them to your budget to see if your business is financially on track at that point in time.
Regular review and comparison to the budget, and even to prior statements from the previous week, month or even year, will allow you to take any necessary actions in a timely manner as opposed to waiting six months after the end of your fiscal year when your accountant returns your financial statements. By this time, everything is history and the statements have little to no value except to the banks, shareholders and government to assess how much tax you will pay.
John Petrocelli, P.Eng., is the sales manager for Backyard Getaways Inc., in Brampton, Ont. They specialize in complete design/build of residential swimming pools and landscapes. He can be reached via e-mail at john@backyardgetaways.com or by visiting www.backyardgetaways.com.
