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It’s halfway through the year and we can’t believe it either! Have you set yourself up for success by reforecasting, evaluating your pricing, meeting with your CPA, etc.? There are steps you can take to make sure you’re finishing this year strong and preparing for next year. Here are our top 3 highlights from our Founder & CEO, Matt Garrett to create safety and security in your business.
Key Takeaways:
- A budget is what you set at the year-end as the year goes on, you’re reforecasting every quarter.
- Check all of your loan agreements and make sure you understand when they renew, what they are for and what the interest rates are.
- Check your lease and rental agreements to see if they have cost of living increases every single year, 2%, 3%, 4% percent annual escalators, or if you can renegotiate your lease to lock in low interest rates.
- Download our TGG Mid-Year Checklist
1. Budgeting vs. Forecasting
A budget is what you set at the year-end and it’s your annual business plan as you’re setting up for the next year. While you won’t start next year’s budget until around October, when October comes around, you’re going to take the first three quarters worth of results. As the year goes on, you’re reforecasting every quarter. You do that by looking back one quarter and you forecast out the next so you’re constantly rolling through this process.
As a reminder, take the time to meet with your Executive team. Understand what you’ve accomplished in the last quarter and what you’re looking to accomplish in the next three, four quarters and reforecast through it. As you do that, you’re going to have a much better understanding of where you are with your business and what you need to do to make effective changes.
2. Check Your Loan Agreements
This is unique to what’s going on in the world right now, but check all of your loan agreements. Make sure you understand when they renew, what are they for and what the interest rates are. If you have to renew and you were paying 4% and now, you’re going to pay 7% because of raising interest rates, make sure you’re checking on all of your loan agreements in order to avoid an uncomfortable surprise.
3. Check Your Lease Agreements
While checking your loan agreements, make sure to check your lease agreements as well. Do you have lease and rental agreements that have cost of living increases every single year, or do you have leases that have 2%, 3%, 4% percent annual escalators? Do you have the ability to extend under the prior lease terms? Or do you have to renegotiate a new lease? Can you renegotiate a new lease now even if you have 2, 3, or 4 years left on your existing lease in order to get your rates and rental rates locked in for now, and the future to be safe? These are all things you should be thinking about and looking at it when it comes to your lease agreements.
Conclusion
These are just a few steps you can take to make sure your business is on track and you’re preparing for year-end. To see what other steps to take, download our TGG Mid-Year Checklist! Our team has put together a comprehensive list of everything you should be doing right now and as you start to plan for next year.
This post was reviewed by our team of accounting and financial experts. TGG’s mission is to make business owners’ lives better through excellent financial management. We strive to provide the most up-to-date and objective information on accounting-related topics so our readers can make informed decisions based on factual content. All posts undergo a review process with at least one member of our Leadership Team to ensure accuracy.
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Matt Garrett is the Founder and Chief Executive Officer of TGG. He is a regular speaker across the country on behalf of Vistage educating business owners on the need for sound financial practices, and is Vice President of the Board of Directors of FINACA. Under Matt’s leadership, TGG has received the following recognition: INC. 5000 top companies in the U.S. five years in a row; one of “San Diego’s Fastest Growing Companies” the past four years; and is among San Diego’s “Best Places to Work.”
