1. Make a meaningful plan

To borrow a sentence from my former boss: "Planning without action it is a dream. Action without planning

It is a night mare."

That's true. A business activity without a plan is really troublesome. If an enterprise develops and expands rapidly without good planning, it is bound to encounter many financial problems caused by lack of prediction and foresight. For example, financing difficulties, uncontrollable expenses, the increase of non-performing assets such as bad accounts receivable and overstocked inventory, blind investment expansion, and the break of cash chain. A good plan can convert the corresponding favorable factors and unfavorable factors into figures and put them in the financial model, and calculate the possible impact of potential risks by means of valuation, possibility analysis, scenario simulation and sensitivity analysis, so as to avoid or control risks better. At the same time, budget is also a management accounting tool, which serves the decision-making of enterprises.

There are many ways to classify budgets, so I won't go into details about those books. According to my own work experience, I divided the planning budget into the following categories:

(1) Planning of brand-new enterprises

A new enterprise that is about to be established or just established needs to make an overall medium-and long-term (5-11 years) budget. Generally, it includes a complete income statement budget (sales, production, costs, expenses, etc.), the company's cash flow budget for the next few years and the investment plan of the required funds, the initial and medium-and long-term personnel plans, and the initial and medium-and long-term capital investment (Capital

Expenditure, that is, fixed assets and long-term deferred expenses, etc.). It is also possible to make corresponding tax planning, the schedule of the establishment of different legal entities, the distribution of equity ratio, and the financing loan plan for the needs of tax and foreign exchange management.

it is not easy to make a complete plan. I once had the opportunity to make a complete set, and it took nearly half a year before and after to fully reflect the overall structure of the company, the establishment of branches, the arrangement of personnel, the arrangement of funds and other factors. For financial personnel, it is really a great challenge.

(II) The medium and long-term budget of an enterprise

is basically similar to the first one above. It's just that the object and purpose of the service are different. The planning of new enterprises is generally for potential investors or shareholders, or financial institutions, with financing as the main purpose. Therefore, the expected return on investment is the focus of the plan. It is also a platform for action and a benchmark for future work for management.

The medium-and long-term plan of a mature enterprise is basically a guiding action plan, which is the embodiment of the enterprise strategy, and also an indicator for evaluating the achievements of the management. Of course, it can also be used as a financing scheme for enterprises, but from the perspective of financial institutions, the profitability and operating conditions of enterprises in previous years are the real focus of assessment. With the help of medium and long-term plans, we just know what direction the enterprise will use the money and main resources.

(3) The daily regular budget of an enterprise

This should be clear to everyone, and it should be done every year and quarter, and some enterprises have to do it every month. Usually, enterprises have their own budget templates, and financial personnel only need to fill them in. Moreover, most enterprises now use Incremental

Budgeting method

budgeting. It refers to a method of budgeting based on the current sales cost level, combined with the business volume level in the budget period and the future changes of related cost factors, by adjusting the original expenses. For more mature enterprises, this is also the most basic and safest method.

(IV) Project Budget

A budget and evaluation made by an enterprise before making certain project decisions. "Project" can be a big project, such as setting up a branch factory, investing in a new company, acquiring and merging other enterprises, or a relatively small event, such as a marketing plan, office decoration, and equipment purchase and replacement. The budget of a large project, because it involves a large amount of investment, needs to make profit statement budget and cash flow budget just like the budget of an enterprise, and also includes the evaluation of investment return according to the needs of the project, such as net present value, internal rate of return and other indicators. According to the nature of the project and the needs of assessment, the budget of small projects focuses on its impact on the company's overall income statement (financial

impacts on P& p&; L), or a comparison between different options.

(V) Special purpose budget

This category refers to those budgets that do not need a complete income statement, such as cost budget, inventory turnover plan, purchase plan, expense control budget, etc. Sometimes it is a part of the overall plan, and sometimes it is an independent budget, which is used for financial evaluation and serves certain management decisions.

so, when it comes to the significance of planning and budgeting, it is to serve the decision-making of management. Enterprises can take budget as a decomposition of management decision-making objectives. For example, the company has set a goal of "making 21% more profit this year than last year". Then it is necessary to split this goal into specific indicators that can be achieved by various functional departments. For example, the production department should increase output, reduce energy consumption and reduce costs; The sales department should increase sales, the marketing department should cooperate with advertising and promotion, and the distribution logistics department should improve efficiency; The financial department should monitor the costs and expenses, the personnel department should recruit more people, and at the same time, it should improve the cooperation of personnel in various departments to reduce internal friction.

only when we put the management objectives of the enterprise into the planned budget can all departments know what they should achieve. Only when all departments have achieved the targets can the enterprise complete the whole plan. If some indicators can't be achieved, the management should consider how to make up for it or adjust the strategy and plan at the same time. In this way, all departments follow the plan, the plan follows the strategy, and the strategy is adjusted in time according to the actual situation, thus forming a virtuous circle in the management of enterprises. Therefore, in the long run, the planned budget will eventually lead to the healthy and stable development of the enterprise.

second, plan the future of a new enterprise

as the founder or leader of a new company, you should not only be brave enough to launch a huge strategy, but also be good at planning a blueprint for the future.

however, it's really not easy for a new company to plan from scratch. It is necessary for producers to be quite familiar with the company's business, clearly grasp the market environment and trends, and at the same time have considerable financial knowledge and certain ability to calculate and judge. This is usually something that needs a team to do, but often new enterprises don't have so much time and manpower allocated to the plan. Therefore, the financial supervisor needs to make these plans by himself. What's more troublesome is that the founder of an enterprise may only have a rough idea or product concept. How to turn these seemingly simple and rough concepts, ideas and inspirations into a huge and systematic financial plan often makes the financial staff feel headache. I want to give you some ideas and methods here. After reading my description below, maybe everyone will not have a blank mind when they face a plan that starts completely from blank.

(1) Forecast of income

As the saying goes, "No top line, no bottom line". The top line here is sales revenue, and the bottom

line is profit (it doesn't matter whether it is "net profit" or other similar concepts).

Therefore, the income forecast is a key. But the problem is that income is the most difficult to predict. An enterprise of the same size may make sales of 1-5 million yuan per month, but it is also possible to make 11 million yuan if it encounters a big order. Then the annual income may not be from 11 million to 111 million, and the difference is several times or ten times. Many factors influence the amount of sales. How can we predict the sales of an enterprise without any historical data?

one trick to teach you is to master the "key variables", which are the most critical factors that determine the sales volume of an enterprise. This is what an old colleague and I summed up after making many business plans in different industries. Of course, there may be a similar saying or a more professional term on the market. Anyway, it is shared with everyone, and there should be no problem of exclusive copyright.

The following passage is an adaptation of some speeches I wrote during my previous training, all in English, and I don't want to translate Chinese any more. I believe most students in Hantan can understand it.

(II) Prediction of costs and expenses

The prediction of costs and expenses is much simpler than the income model. In terms of income, because there are many variable factors and the range of change is also large, it is difficult to predict accurately. In terms of cost and expense, they are all real things, and there are few variables. Once the scale of the company's operation is basically determined, it is easier to estimate. The following simple examples show that you can apply them flexibly according to the situation.

1. cost:

a. direct cost-calculated according to the ingredients and raw materials of each product. Of course, it is necessary to know the output and the "Product

Mix" between various products before getting the total cost. If we know the composition of raw materials, specific gravity, the amount of materials used and the unit price of various raw materials, plus the output of each product, it is easy to calculate the total cost. Total cost of a product = ∑ (unit price of raw materials * consumption of raw materials for a single product *(1+ possible loss rate%)) * output.

for manufacturing enterprises, this is the most direct and generally accepted calculation method. The only drawback is that there may be many kinds of products, various raw material industries, and seasonal fluctuations in raw material prices, which will make it more complicated and cumbersome to establish a calculation model.

B. indirect costs–

estimated according to past experience or actual situation. For example, the electricity bill. Generally, how much electricity is needed for an assembly line to work at full capacity in a day? Experienced production managers should be able to estimate the electricity consumption according to the design of the equipment, the estimated output and their personal experience. For another example, the use cost of some tools and consumables that are not direct raw materials but must be used in production can also be estimated according to experience. Depreciation or amortization related to capital expenditure should be done according to the original depreciation and amortization methods.

what we are talking about here is to calculate the total cost, not to allocate it. If you want to allocate indirect costs to different products in the budget, you must use a certain allocation method. Whether to allocate according to the output, or according to the time consumed in production, or to use ABC (activity-based costing) as we said before, should be judged according to the actual situation (or assumed possible situation) of the enterprise.

C. ratio cost-a relatively simple and easy method. For industries with relatively stable business forms, or service industries (especially catering industry), there is generally an empirical value of ratio cost. This can be used directly in the budget. For example, the main products produced by a factory are all rubber, and there are 111 products in three categories. The raw material structure of the products is similar, but the final shape of the finished product is different, so the processing technology is slightly different in the final step. If so, the direct cost may only need to be calculated as a ratio, and the different factors such as equipment depreciation, tool consumption and labor cost can be taken into account in the indirect cost.

D. The cost of some industries is basically labor cost, and there are almost no raw materials, for example, accounting firms, lawyers, consulting, etc. in professional service industries. Then its cost is the salary and various benefits of personnel. Plus training, human resource management and other expenses. Sometimes, it should also include the labor costs subcontracted to other professional companies or freelance individuals.

e. after designing and developing a product or software, some enterprises with development ability have a considerable amount of R&; D expenses can be capitalized according to certain requirements, instead of directly doing current expenses. In this way, it is necessary to share these expenses in proportion and record them in the cost for a long period of time. For example, it can be simply said that the cost of a software company = pre-development cost allocation+direct labor cost+system maintenance cost, etc.

When it comes to cost estimation, there are still several factors to consider:-

F. Production output and equipment maintenance and update. Generally speaking, the output of a production line or a fixed production process is limited, and it is impossible to increase indefinitely. Is the aforementioned Volume

capacity. Therefore, when making a budget, the output limits the sales volume and also affects the cost. However, the output and cost do not increase or decrease in parallel. It is possible that after reaching a certain output, if the output is to increase, the maintenance cost of the equipment needs to be increased. In this way, the total cost will increase by one piece. As for the increase, it is necessary to study it well with the production department.

g. product mix changes. Different product combinations will not only affect the total cost and the overall profit level, but also affect the production efficiency, staffing and other factors, thus affecting the cost of different products. For example, if an enterprise produces AB products, it can use the existing resources of the enterprise to complete the production. However, the sales volume of product B is very good, the selling price is also very high, and the gross profit is very high, so the enterprise decided to expand production. In order to produce more B, employees need to work overtime because the original production plan of A can't be abandoned, and working at night increases the loss of raw materials a lot. At the same time, the original production equipment needs some transformation to meet the needs of increasing production, and so on. The cost of B in this production increase part cannot be replaced by the original cost of producing B.

H. restrictions and constraints. In this respect, we should consider what factors may become bottlenecks in production or sales. For example, the production of a certain product requires a rare metal, and the output of this metal is extremely limited. Therefore, when making production plans, we should take into account the impact of constraints. For another example, although there are many people in China, when calculating the required labor force, we cannot think that human resources can be supplied unconditionally and infinitely. It is necessary to consider the recruitment and training cycle, and the number of qualified human resources available locally. There are many other factors that may become constraints, such as the distance of raw materials, transportation capacity, climatic conditions and so on.

besides objective factors, there are also subjective factors. To put it bluntly, if the enterprise promises to provide food and shelter, and the assembly line needs to recruit a large number of workers, how can the housing and food problems be solved?

(As for how to convert the risks caused by these restrictions and constraints into figures and put them in the income statement, we will mention them in later chapters. )

2. Expenses:

The estimation of expenses is similar to the indirect costs mentioned above. These expenses include: salary and welfare of managers, amortization of office equipment depreciation and decoration expenses, office rent, market expenses, travel expenses, transportation expenses, communication expenses and office work.