Do you know the difference between budgeting and forecasting?
BUDGETING is assigning a purpose to the money we have right now.
budgeting answers questions like: How long can we operate on the cash we have? How far can it take us? Can we make investments?
FORECASTING is planning what we’ll do with the money we don’t have yet.
forecasting helps us see: what revenue targets we need to hit to break-even, if you need to give up one thing to afford another, how your marketing budget will affect profitability and what you expect the ROI to be.
Budgeting and Forecasting work hand and hand for your food business…
When you create a forecast for the year, instead of filing it away, we turn it into an active budget and work with it regularly.
If our forecast doesn’t come ‘true’ we can adjust in real-time and still hit our financial goals.
In turn, a budget without a forecast can lead to not knowing how or where to spend your money, and for some leaves them afraid to spend the money they do have!
If you want the tools to create a budget that works for you and a forecast that supports your business needs, then start here with a Profit Assessment.
Join us in the Profitable Food Business Community where we're talking Budgeting and Cash Flow Management with other Food Business Owners just like you!
About the Author: Sarah Delevan is a Food Business Financial Coach and Consultant with over 7 years of working in the food industry. She received her MBA from Rollins College and In 2017 she founded Sarah Delevan Consulting based in Los Angeles, CA and serving clients across the United States. She is the creator of the Financial Success Formula and the founder of the Profitable Food Business program as well as the host of The Good Food CFO Podcast. To learn more about Sarah and opportunities to grow a more profitable food business Click Here.