The End of Summer is the Best Time to Budget: Here’s Why You Shouldn’t Wait Until January

The mornings are getting cooler, the kids are back in school, and your summer schedule is giving way to fall routines. While the holiday season and the new year might still feel faraway, this is the perfect time to start your budgeting process for next year.

Why? Because waiting until December (or worse, January) means you’ll be reacting, not planning. Your 2026 budget shouldn’t be a rushed set of numbers slapped together over a holiday break. It should be a thoughtful, strategic plan that positions your business to thrive.

In my work as a fractional controller, I’ve seen how powerful early budgeting can be. I’ve also seen how easily budgets fall short when they focus only on the “roses” (the big goals, the new initiatives, the projected growth) and neglect the “thorns” that can derail even the best-laid plans. Those thorns are risks, and failing to identify and plan for them can put your business in a vulnerable position.

Let’s talk about how to build a budget that captures both your opportunities and your risks, and how to quantify them so you can make better decisions.

At its core, a budget is your financial blueprint for the year ahead. It’s not just a spreadsheet. It’s a statement of priorities, a reality check, and a roadmap. Your budget should:

1. Project revenues and expenses with enough detail to be actionable.
2. Align with your strategic goals so money is spent where it matters most.
3. Incorporate both opportunities and risks so you’re prepared for different outcomes.

The challenge? Most department heads tend to focus on the exciting part (“We’ll grow sales by 15%” or “We’ll launch a new product line”) and overlook the risks that could wipe out that progress.

The Roses and the Thorns

Think of budgeting as planning a garden. It’s fun to imagine rows of beautiful roses, but you also need to account for the thorns (pests, drought, sudden storms). In business, those thorns might be:

• A key supplier increasing prices unexpectedly
• A drop in demand due to market shifts
• Turnover in a mission-critical position
• Technology failures or cyberattacks
• Regulatory changes that increase costs

These aren’t “if” scenarios. They’re “when” scenarios. The businesses that thrive are the ones that acknowledge the thorns and plan for them in advance.

5 Steps to Identify, Assess, and Quantify Risks in Your Budget

1. Start with a risk brainstorming session - Bring department heads together and ask, “What could prevent us from hitting our targets next year?” Encourage them to think beyond their own departments. Sometimes the biggest risks come from outside their direct control.

2. Categorize your risks - Group them into categories such as operational, financial, market, compliance, and technology. This helps ensure you’re looking at the full picture, not just the obvious issues.

3. Assess likelihood and impact - Rate each risk on two scales: How likely is it to happen, and how big of an impact would it have? A low-likelihood, high-impact event (like a major natural disaster) may require a different strategy than a high-likelihood, moderate-impact risk (like increased material costs).

4. Put numbers to the risks - Translate risks into dollar amounts. If a key client represents 15% of your revenue, losing it means a 15% revenue hit. That’s not an abstract threat; it’s a quantifiable gap you can budget a contingency for.

5. Build contingencies into your budget - Don’t just note the risks, create a financial cushion. This could be in the form of a risk reserve, flexible expense categories, or alternative revenue plans. A good rule of thumb is to set aside 3–5% of your annual budget for unplanned but probable risks.

Turning Risks into Opportunities

Here’s the upside: the same process that helps you spot risks can also reveal opportunities. When you dig into your data and market intelligence, you might find:

• A service line that’s outperforming expectations and deserves more investment
• A chance to renegotiate vendor contracts for better terms
• Inefficiencies that, once addressed, free up capital for growth

Budgeting isn’t about predicting the future perfectly. It’s about preparing for multiple futures and putting yourself in the best possible position to succeed.

Your Next Steps

If you start now, you can finish your budget by early November, leaving time for adjustments before year-end. This gives you:

• A stronger plan backed by real data and thoughtful risk management
• A clearer picture for department heads so they can set realistic target 
• The peace of mind that you’ve addressed the thorns before they surprise you

If you need help facilitating a budgeting process that covers both risks and opportunities, I can guide your team through it step-by-step. Learn more about how I work with businesses like yours at steadyhandaccounting.com. 

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