Be honest, how accurate was your Income Budget this year? A 5-7% variable on your budget is a good outcome. Have you analysed the results? Even the most accurate results must be analysed and studied. As the saying goes, ‘The Devil is in the Details’.
We tend to only do an analysis when we missed our mark, but even when you do better than expected, it’s important to take the time to study the results and learn from them. You want to understand why you did well, or not if that is the case.
A good place to start is an exercise that is referred to as ‘What Worked and What Didn’t Work’. Go through your previous year’s revenue plan (budget) strategies and measure how you delivered against that strategy. Did it not work quite as you had hoped? Did it work better than anticipated? Or did you simply drop the ball and not drive the deliverable hard enough? Be open and honest and play Devil’s Advocate by asking “what if?”. Get a good debate going amoung your team and flesh opinions and suggestions out. Then ask, “what could we have done?’ Hindsight is a wonderful thing.
Another important aspect of the analysis is to find out whether you have enough data in your budget. Was it granular enough to understand the outcomes? Can you answer all the why questions? Be careful though not to over complicate it. Remember to only look at the data that has a real impact on your deliverables and that drives action.
Question if your budget was realistic or was it influenced too many by operational needs, expense budgets and other priorities? Yes, we need to push ourselves to make changes in our deliverables, but it is hard to influence demand on an unrealistic platform.
Use the findings from your analysis and learnings to improve on your next budget. Read articles on revenue management and budgeting to spark new ideas and ways of thinking. Your budgeting skills will improve year on year with conscientious attention to detail.
Revenue Resolutions can help your budget process, with 25 years of hospitality experience and about 20 years of budgeting. Contact Theresa Prins on 071 364 6381 (firstname.lastname@example.org) for more insightful information or training and development opportunities around budgeting.