The practices of strategy and budgeting are often confused and completed out of sequence. In essence, strategic thinking is focused on how we wish to position the organization in the future - our purpose, in which markets we wish to play and how we plan to be successful in these markets. Budgeting, on the other hand, is the process by which we allocate resources in order to achieve this strategy
As can be seen, the sequence is important. It makes sense to decide what you plan to do before allocating resources in oder to do so.
The other important factor here is to be clear why you are in business - the purpose of business. The purpose is NOT to make a profit. The purpose is to meet the needs and add value to your customers. If you do this well, you will make a profit. Profit, therefore, is the OUTCOME of business, not the purpose.
Is this an important distinction? We believe it is. Because it focuses the attention of the business on the critical drivers of profitability, rather than just the outcome.

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