Plans · Business

Plan next year's budget

8 weeks · 5 phases · 24 tasks · 4 milestones · 5 risks

For a finance lead or founder building next year's budget with a handful of team leads. Assumptions are agreed in week 1 so everyone works from the same numbers, team budgets come in by week 4, and the last weeks are review, trade-offs and sign-off. Start earlier if your board needs the draft before the year ends.

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Makes it a program in your harbor, dated from today.

Milestones

Week 1Assumptions agreed
Week 4Team budgets in
Week 6Draft reviewed
Week 8Budget approved

The plan, phase by phase

1. Set up

Week 1. Agree the timeline and the assumptions everyone will use.

Week 1Agree the timeline and who signs off
Week 1Write down the shared assumptionsGrowth, prices, pay rises and cost increases, written once so every team uses the same numbers.
Week 1Build the template every team fills in
Week 1Pull this year's actuals and forecast to year end

2. Revenue and headcount

Weeks 2 to 3. Forecast the two biggest lines first: what comes in and what people cost.

Week 2Forecast revenue by product or customer groupBuild it from customers and deals you can name, not a percentage on top of this year.
Week 2Collect hiring plans from each team lead
Week 3Cost each new role with its start dateInclude payroll taxes and benefits, not just salary.

3. Team budgets

Weeks 2 to 4. Get each team's costs in, with reasons.

Week 2Send the template to team leads
Week 3Meet each team leadGo through last year's spend line by line and ask what changes.
Week 3List the contracts and renewals due next year
Week 4Collect the completed team budgets
Week 4Check every large one-off spendAsk what happens if it's delayed a year.

4. Combine and review

Weeks 5 to 7. Put it together, test it, and make the trade-offs.

Week 5Combine everything into one budgetCheck the totals tie back to each team's template.
Week 5Compare it with this year and with the targets
Week 5Build a monthly cash forecastA budget that balances over the year can still run short in a single month.
Week 6Run a downside caseWhat happens if revenue lands well below plan, and what you'd cut first.
Week 6Agree cuts or trade-offs with team leads
Week 6Review the draft with the leadership team
Week 7Revise the draft

5. Approve and share

Weeks 7 to 8. Get sign-off and set up the habit of checking against it.

Week 7Present the final budget for approvalShow the assumptions and the downside case alongside the numbers.
Week 8Get sign-off
Week 8Share each team's budget with its lead
Week 8Load the budget into your accounting system
Week 8Schedule monthly budget-against-actual reviewsKeep them short: the big differences, why, and what to do.

What usually goes wrong

Team inputs arrive late
Team leads put budgeting behind their day jobs, and the whole timeline waits on the slowest one.
What helps: Set the due date in week 1, meet each lead in week 3, and fill gaps with this year's numbers if needed.
Likelihood 4 of 5 · impact 3 of 5
Revenue forecast is too optimistic
Spending is set against income that doesn't arrive.
What helps: Build revenue from named customers and deals, and plan what you'd cut under a downside case.
Likelihood 4 of 5 · impact 4 of 5
Costs are missed
Renewals, price rises and one-off costs that nobody owns don't make it into any team's budget.
What helps: List every contract and renewal in week 3 and give each one an owner.
Likelihood 3 of 5 · impact 3 of 5
Assumptions change halfway through
Teams rework their numbers and the timeline slips.
What helps: Freeze the assumptions in week 1 and adjust the combined budget centrally if something changes.
Likelihood 2 of 5 · impact 3 of 5
Nobody uses the budget after approval
Without regular checks, overspends are found at year end when it's too late.
What helps: Schedule monthly reviews with each team lead before the year starts.
Likelihood 3 of 5 · impact 3 of 5

Using it

Copy what fits and cut what doesn’t: no real project matches a template. In Harbor the plan becomes a program with these milestones, one project holding every task with its due date, and these risks in the register, all yours until you hand them out. The first phase starts in To do and the rest wait in the backlog.

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