Prepare your budgets for the economic change.

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Most budgets for the year 2023 were formulated in 2022, when the prevailing economic outlook was more bleak. However, we are now halfway through the year, and the signals are decidedly more encouraging. Do not let the mindset of the past prevent you from envisioning what is about to unfold.

Those who fail to recognize the improving economy are likely to adopt a defensive stance for an excessive period, missing out on prime opportunities for organic growth.

There is ample evidence that the current circumstances are improving, despite fluctuations in stock prices driven by market traders.

The Real Estate market has stabilized, with housing prices rising in certain regions.
Personal debt is on a downward trajectory.
The manufacturing industry is experiencing growth.
Exports and imports are rebounding, among other positive trends.

There are numerous reasons to be optimistic about the economic prospects in the coming years. The evolution of the energy landscape, for instance, lays the foundation for growth. Lower costs are already fostering increased competitiveness in some industrial sectors

Increase your budget investments in innovation, research, and development.

If your budgets were designed for negative economic winds, now is the time to review our economic positions. Here are some steps to consider compiling for 2023-24:

Budgets: Positioning oneself in market segments with growth prospects.

The landscape has undergone significant transformations since the global financial crisis. The recession has eliminated some market segments and redefined others. This is the moment to reassess the market spaces you occupy and strategically position yourself to capitalize on the upturn. Explore new segments and experiment with fresh ideas to expand your brand and gain prominence.
- For instance, the wealth effect generated by rising stock prices and real estate values may make premium product segments more appealing in the coming years. Stay ahead of the competition and ensure that your resource allocation aligns with your growth prospects.

Increase your budget investments in innovation, research, and development.

If you haven't reduced the budget allocated to innovation, technology, and product development in the past five years, excellent. If you have, it's time to take action. Make sure to invest sufficiently in innovation and focus on the right research and development projects, so you can deliver compelling products that meet the growing consumer demand.

Adjust your budget objectives and KPIs.

You may need to make some upward adjustments as the economic landscape changes. Lack of ambition only permits mediocre performance.

Allocate funds for growth.

Even as you loosen the purse strings, ensure you have some funds available to invest in marketing or advertising as the market recovers. You may not need to spend it immediately, but be prepared to act and outspend your competitors, segment by segment, as consumer spending rebounds.

Enhance your skills.

Allowing talent to become obsolete is regrettable. Some visionary companies never reduced training during the recession, but many others did. Now is the time to renew training for the new scenario. What new skills and capabilities will you need to succeed in the emerging landscape?

Maintain pressure on productivity.

Many people slack off when times are good. Don't relax your cost management as you begin to feel increasing demand. Maintain a sharp focus on gross margin.

Prepare for inflation.

While commodity prices and inflation remain moderate, be alert to a potential inflationary rise in the future. If experts anticipate it within the next two years, develop a methodology to ensure your pricing policies and procurement contracts stay up to date.

I'm not suggesting that companies should excessively expand without appropriate controls, but remember that the market doesn't operate on a calendar year. If the context changes, adjustments should be made now, not on December 31st. Your leadership is crucial. What are you waiting for?