Is cutting the budget right thing to do?

Hi all.

It has been such a long time since my last update.

Being the last month in the Japanese fiscal year, September is usually very busy.

My clients were anxious to use the remainder of their budgets, which needed to be spent by the end of the month.

In everyday life, if people don’t have the need to spend their money they will save it for the future.

However, business organisations work differently;

if they don’t spend their full allowance in the set financial period, the remainder will be deducted from the future budget.

This leads to a tendency to spend heavily towards the end of the year.

Is this the right thing to do?


No.

A company budget is intended for driving the business forwards.

It is not designed for unbalanced consumption such as this panicked, last minute spending.

Unfortunately, it is an all-too common practice.

In times of economic downturn, this attitude similarly leads to a tendency to heavily cut spending and fear the expenditure of company resources.

We must change this mindset.

Whatever the financial condition, corporate management teams are responsible for investing in and propelling business onwards.

Capital is necessary in order to create new business opportunities and strengthen existing structures.

When we go on a diet, we change our eating habits and out attitude towards food.

However, we can never stop eating and drinking.

In order to survive, we must be smart about the use of our bodies and the food available to us.

Investing in people development follows the same rules.

If we don’t cultivate our human resources, staff will not contribute to the progression of future business.

Even in times of economic downturn, we must be smart with our resources and learn to use them in a way that allows our business to be strong and dynamic in the face of financial challenges.

Cutting budgets for people development in times of recession will inevitably damage business opportunities.

Now is the time to ensure the ongoing success of your company; be proactive and astute with resources and create a strong foundation for future growth.