Is PBF good for you?
No, it doesn’t stand for peanut butter and fluff. But I did eat peanut butter and fluff sandwiches every single school day all 5th and 6th grade. A story for another day.
When I refer to PBF, I am talking about Planning, Budgeting, and Forecasting. Most companies aren’t very good at this. Either they don’t do it at all or they don’t do it constructively or repetitively. This on-going exercise should be a road map that tells the business what needs to be done. Like with any map, you need to; pay attention to it so you don’t get lost, alter the route if necessary, keep the destination in mind.
If you’re running a company, here’s an annual process that will keep you focused on looking ahead.
3-Year Plan: Pick a slow period of your fiscal year. If you don’t have any slow periods, pick a time that is about 5 months before the start of your fiscal year. During this time think about your longer-range goals and strategies. Develop a 3-year plan.
Budget: Once you’ve nailed down your 3-year plan, start to think about next year’s budget. It’s basically an exploded view of the first year in your 3-year plan. Start the budgeting process about 2 months before the beginning of the new fiscal year. Here’s a challenge: Get it completed and approved before the new fiscal year begins.
Forecast: During the new fiscal year, you will learn a lot of things as the year progresses. How are you doing versus your budget? If the actuals are far off from the budget, think about putting a forecast together for the remainder of the year.
The hardest, but most important part is to repeat this every year. As with anything, you will get better at it. PBF will provide a map that enables you to establish and achieve your goals.