Maximize Results By Turning Your Budgeting Process On Its Head

It’s difficult to believe, but the time for budget and marketing plan development for 2017 is upon us.  Yes, it’s true, now is the time when many of us are working on our plans for the coming year.  As we go through this exercise, the challenge for all of us is to remain focused on the desired outcome.  Do we all agree on what that outcome should be?   Surprisingly, perhaps not.

For many, the calendar clicking over to late July/early August signifies the time of year when we must start the dreaded budget process.  The budget process and the marketing plan process go together, but we typically look at them in this order; budget first, marketing plan second.  There is a fundamental problem with this approach.

In order to get the most from this entire process, we must first accept the notion that a “plan” for the coming year will result in a “budget” for the year, and not the other way around.  Is this how you are currently approaching the process?  Many of us see the budget and the marketing plan as two “tasks” that must be accomplished, and while they are accomplished at the same time of year, they are not necessarily connected.  This represents an enormous error in strategy.

First, we need to get away from the vague and incomplete term “marketing plan.”  The proper plan that we should develop for each coming month, year, or whatever period needs to be much, much more than that-- it needs to be a true “strategic plan.”  I’m not splitting hairs here; a comprehensive strategic plan should include focus on marketing, sales, revenue management, catering, customer service, guest satisfaction, and more.  Think about it this way; as the owner and manager of your hotel business, you need to have a plan that encompasses all that you will do in the coming period of time.  A traditional “marketing plan” merely scratches the surface of this need. 

Utilizing all of the resources available to you as the business leaders of your hotels, you should assign responsibility to your key team members to provide the building blocks for the strategic plan within their specific areas of responsibility.  How well do you know your competition?  How well do you know what your competitors will be doing in the coming year?  A comprehensive understanding of the marketplace is crucial to the development of an aggressive-yet-achievable strategic plan.

Once you’ve completed your strategic plan, you will be ready to build your budget.  Yes, you heard me correctly; you can’t start the budget without the strategic plan, as the strategic plan is the fundamental basis for that budget.  Too often, we work on the plan and on the budget in separate silos, hoping that they can successfully co-exist.  The proper way to go through this is for a budget to be constructed that becomes the financial manifestation or reflection of that comprehensive strategic plan that has been blessed by all.

The key to all of this is for us to commit to a planning process that is both strategic and comprehensive.  With a strategic plan and budget that meet these criteria, your asset(s) will be best positioned to enjoy financial and market share successes in 2017 and beyond.