In the previous post “Growth and scaling downfalls” we discussed human capital aspects of a growth project. The next topic on the scaling preparation “to do” list is financial resources.
It goes without saying that pre-planning for financial resources needed to meet scaling goals is not only essential for obvious reasons, but it also important in contributing to both tactical as well strategic decision making.
So, who should be involved? Granted that there many different methods, it stands to reason that such determination should be a “top down” approach, as in starting with the project manager. Additional team members should include project sponsor, member of operations management as well as finance. Of course, it is understood that the CFO (used here generically to refer to the leadership of the financial division) had to be involved in the initial SOP creation for such projects.
The mechanics of a budget creation are certainly widely known and not a subject of this discussion, however there are couple of points worth mentioning:
• Realistic budgeting: one of the rather common issues in budgeting for growth is the ability to understand the nature of such project. It is extremely vital to understand that unlike other projects, the uncertainties in growth and scaling dictate building a larger margin of errors into the budget.