Budget for the Worst
Planning
Budget for the worst (or minimum) … and then set hard targets above budget to strive towards – sometimes called ‘stretch targets’.
Most people plan for the best and then wonder why their business fails to meet their plan. Failure to meet budget can result in business failure if the budget is too aggressive. So it's best to have a realistice Budget (above Break-Even) and the set some stretch (or hard) targets above this to give some space.
So a good strategy is to set budgets at an achievable & realistic level and then set some hard targets to hit to add the blue sky to your business results. Budgets and targets can be particularly effective with sales force management.
(© Profit Advantage #37931)
