Once you have a business plan, move on to setting targets for the short and medium term. Do this together with your team, making sure everyone understands them and how they will be achieved. Then make sure everyone agrees that they are achievable. If your team isn’t willing to agree on this, go back to the drawing board.

Next, it’s time to draft financial forecasts for the same periods. There’s a temptation to do these just to satisfy some outside party such as a lender, but they are a key management tool. Highlighting deviations from forecasted numbers allows you to take corrective action more quickly. Your forecasts are dependent on assumptions and estimates, so here it is important to be conservative.

The last step in the process is to put together your near-term budgets. This is where team input is critical.

Build budgets from the ground up, i.e. “here are our objectives, how much do you think we need to budget to achieve them?” rather than “here’s your budget!”