1st New Year's Revenue Resolution - January 12th

Happy Humpday! It’s Wednesday and we are on New Year’s Revenue Resolution #1 – Create your 2022 Budget (or update it). For me this has got to be plan number 1! You may ask, especially if revenue management (optimization) is new to you

'why start with a budget. That’s an operational item to control cost, not to create revenue and I’m most concerned with creating the revenue then I’ll figure out where I’ll spend it.’

Well you are right but similarly wrong. The budget certainly does help us to control costs. Helps us to purchase equipment, product, and consumables at the right times. And makes sure that we know the right amount of labor we need. So yes very operational indeed. But what if I told you, the budget DOES help you make money?!? Intriguing yes?!? Well it’s true, it does. Just as a forecast helps you to fine tune your expectations therefore strategies, tactics, rates, and marketing a good budget helps to direct that spend and setup earlier. Lets consider why is this.

From a marketing standpoint, everyone’s challenge is always budget. There’s never enough budget to spread to every tool, channel, or product you’d like. For your most effective spend and overall production effectiveness it’s best to know where and when your marketing should be deployed and targeted.

From a strategy, tactic, and rate stand point budgeting the year allows you to set your rates throughout the year based on your financial strategy and plan not reactionary based on the compset. You are setting your rates and promotions based on the plan you created off of what you believed will happen. If you are accurate and informed let the compset react to you. Yes of course you’ll work to ensure competitive rates and take advantage of opportunity, but starting the year and with nothing (or minimal) on the books, our goal is to set up the road for success. The budget allows us to stay on top of all of these. Yes it permits us to control the operational, but it also allows us to prepare and set all of the other strategies we utilize to sell our business. It directs where to prioritize marketing, where to direct promotions, where we can compress rate, etc. And these help us to ensure we are starting off on the right foot to get our best revenue possible for the year.

Join me tomorrow as I reflect on my 2nd New Year’s Revenue Resolution: Set A Specific Time Devoted to Revenue Weekly.