Nailing down your budget for the year is no easy task. Once you’ve navigated the obstacles in your budgeting process and came to your best conclusion on the many unknowns of the year ahead, you are finally at a number that allows you to rest easy. However, the battle is only halfway over. Now you need to figure out your spread. You know where you need to be to come out on top for the year, but how about each quarter or each month? There are many smaller victories along the path to conquering the year.
Start with what you know
There are so many unknowns when it comes to budgeting. It really can make the whole process a bit overwhelming. To shed some light on the unknowns, start with what you do know. Maybe Q2 is a bit of a grey area, but you know that you have the Olympics in Q3. If you know your Olympic budget and how much of that is incremental revenue, then you are in a pretty good position to not only come up with a Q3 budget, but a Q3 spread, as well. Also, you have likely shed a bit of light on Q2 if you know how your Q2 performs historically when preceded by the Olympics. This can be applied to most major events on your calendar. When you start with what you know, it can make the unknowns a bit less daunting.
How big are the pieces of the pie?
Another great place to start when working on your budget spread, is your quarterly and monthly contributions; that is, how big of a piece are they in the budget pie? If, for example, Q1 typically accounts for 22.5% - 23.5% of the yearly budget, you can likely figure out about how much of your yearly budget to put into Q1, barring any sort of major events effecting that number. The same goes for your monthly spread. January typically books like January, February typically books like February, and so on. When you have your budget for the year, and you know how big at least some of the pieces of the pie should be, you are well on your way to an accurate spread.
Put your history to work for you
History tells a story. It can tell you how your revenue and the market are affected by things like big events, political money, and other things that might throw a budget spread off track. When working on a budget, it’s very easy to get consumed with what is happening now and what is to come. Looking back on prior years can make things a little clearer for you. As we said when talking about starting with what you know, looking at how big events played out in the past in terms of their affect on your revenue, should give you an idea of how they might play out again. If, for example, you have the Super Bowl in February, looking at past Super Bowl years will not only give you an idea of how much of to your Q1 budget to allocate to February, but January and March as well, given how the Super Bowl typically affects the surrounding months.
The same concept can be applied to political years. Now, we all know that political can see some wild swings from season to season, but there is likely to be some trend in political versus non-political years. Though political is often anybody’s guess, when you use your historical data, your guess can be a lot closer to a solid prediction of what’s to come.
Let your audits do the talking
On the subject of historical data, audits will clear up a lot of the unknowns when trying to spread your budget. Your maybes and I-don’t-knows can become confidant predictions if you let your audits speak to you. Having a true understanding of not only your historical finish, but also your contribution to the market, will give you solid ground to stand on when building your spread. Going back to our discussion on your slices of pie, your historical audits will tell you exactly how big the pie was, along with each slice. These sorts of trends can be a great foundation to a budget spread.
We have talked about different approaches to take for your budget spread. Digging up audits, pulling reports, can combing through historical data eats up a lot of your valuable time, taking you away from your important tasks at hand. There are solutions available that bring everything you need to one place, allowing you to digest all of the important data at once and streamline your budget spread process.