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BETTER

BUSINESS

BUDGET

PLANNING

How To Make Business Budgeting A

Success Rather Than A Nightmare

Brought To You Courtesy Of :

Crowe Jamaica

47-47 Trinidad Terrace

Kingston 5

Email: info@crowehorwath.com.jm

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Table Of

Contents

Foreword

Chapter 1

Businesses Budgeting Basics

Chapter 2

Steps To Better Business Budgeting

Chapter 3

How And What To Consider When Preparing A

Business Plan And Budget

Chapter 4

The Ins And Outs Of Corporate Budgeting

Chapter 5

Including Social Business Budgets In The Plan

Chapter 6

Impacts Of Debts On Business Budgets

Chapter 7

Managing Business Budgets And Finances Together

Wrapping Up

Foreword

All businesses start out with three main elements

prominently featured in the general make up of the

endeavor. These would be listed as revenue to be

earned, expenses to be incurred along the way and

the projected profits expected. These three categories

are usually studied in depth before the actual

business entity is launched and through this process

there is always the need to have an effective

budgeting platform in place. Get all the info you need

here.

Better Business Budget Planning

How To Make Business Budgeting A Success Rather

Than A Nightmare

Businesses

Budgeting Chapter

Basics

Synopsis

In determining the total revenue the

budgeting exercise can take on a rather

stressful state if this is not done in a factual

and clear manner. Having a clear picture,

statistically, of the revenue expected and

the revenue streams where the

identification of the ways the business

entity if going to make money will

contribute to the actual business engine’s

financial status. This form of budgeting is

important in ensuring the business entity

does not project unrealistic revenue

earnings that will eventually fall short of

the expectations.

The Basics

The expenses which usually fall into three separate categories such as the

semi-variables, fixed costs and the variables are also usually considered in the

budgeting exercise. All these calculations are done on the monthly ratio which

the business progress dictates.

This is the most detailed section of the business engine and usually also

required the most attention when it comes to managing the costing elements.

The profits meant to be derived are usually the reasons why the business

endeavor is being taken on in the first place, thus the basic profits calculated

are also part of the budgeting process.

Successful business entities calculate the monthly budgets and make the

necessary adjustments accordingly to ensure optimum profit making

probabilities. Calculations for budgeting purposes can also be done on a

daily, weekly or monthly basis depending on the individual business

requirements and style.

Chapter

Steps Business To Better

Budgeting

Synopsis

Without proper budgeting techniques in place, the business entity runs the

risk of not being able to get a handle on the financing aspects, thus creating

a lot of eventual complicating scenarios which become a nightmare for the

business. Being able to accurately estimate the expenses and revenues

expected is important to any business entity as it is one of the ways to

ensure the proper finances are available at any given time to enable the

business to run smoothly.

The Steps

The following are some tips on how to ensure the budgeting exercise for the

business in on track and effective:

Checking industry standards and sentiments of the time is something that

needs to be done periodically as the percentages of revenue earning

possibilities is often affected by the market behaviors.

The smaller the business entity, the more likely it is to be effected by the

volatility of the market, and this is especially so when there is a downturn in

the economy.

Designing an accurate spreadsheet is another essential element that should

be included as part of the budgeting exercise. Making clear estimates on the

revenue amounts expected against the percentages allocated toward tools

and materials relevant to the business will give a clear overview of expected

expenses incurred.

Factoring some degree of slack and avenues to cut cost can also be clearly

reflected in a comprehensive budgeting exercise.

Understanding that there is bound to be a lot of movement within the

economy that will eventually have some bearing on the

business entity and then taking

the necessary financial step to

limit its liability will help to keep

the budgeting exercise more

realistic. Ideally this will also

provide better for better cost

cutting exercises that can

positively contribute to the

overall success of the business.

Chapter

How When Plan And And Preparing Budget

What To A Consider

Business

Synopsis

All businesses at some point or another have to consider the preparing of a

business plan and budgeting exercise for its key contribution of the success

and smooth running of the business engine.

What To Think About

There are many elements to consider in such an exercise and the following are

just some of the more necessary considerations recommended:

Business plans and budgeting exercises are designed to give those involved in

the business a fairly accurate and current assessment of the business and its

future intended direction.

The plans will also ensure the relevant information is available to assist in the

business growth based on the funds available. Such information is essential to

the business, especially if there is a need to secure financing facilities such as

overdraft tools and bank loans or venture capital funding.

The business budget should ideally be the most accurate form of

documentation available for the continuous reviewing of the business

environment against the actual performance the business is running at. Most

of the budgeting exercises reflect information on a monthly, quarterly, half

yearly and annual basis.

Focus should be given to area such as the reviewing of the current year’s

progress based on the decisions that brought about the present positioning

of the business entity.

All objectives and strategies that are in place or projected to be so through

the action plans and benchmarks it is measured against. Resources should

also be considered for its consistency and reliability, as these elements can

and usually do effect the business in some way or another when problems

arise.

The anticipated results are also something to be considered as it may require

changes to be made is such anticipations take on a negative form.

Therefore on several different levels the benefits are evident when there is

proper planning stages set up in the form of business plans and budgets.

Chapter

The Corporate Ins And Budgeting

Outs Of

Synopsis

Corporate budgeting is important to any business

entity where the financial position of the company

dictates the strategies, motivations and achievements

that are to be chosen.

Big Business

The following are some of the issues that most corporate budgeting exercises

encompass:

The designing of the budget and then the processes involved in informing the

various levels within the company structure which may include all subsidiaries

and linked business units.

It also provides the clarity and consistence, though in quite general terms

regarding procedures, responsibilities and time lines that would have direct

connections to the corporate budgeting exercise.

With the corporate budgeting in place there is a definition of strategy success

factors and organizational performances indicators in place that can better

gauge the overall condition of the company’s performance. The methodology

used can also be assisted using the relevant software, especially when

implementing budgeting software.

There is also the possibility of being able to have follow-up process added

into the general outline to analyze and variances that may be evident.

The definition of revenue, cost and balance sheet items will be able be better

observed through the more complete corporate budgeting tools thus

providing information that is vital for future consideration.

The cycle time which would ideally include the streamlined consolidation

procedures will also be dealt with and worked out through the budgeting

process, all of which is much simpler and more effective and ensures the

eventual smoother running of the business entity.

There are a number of software programs available that can assist in making

the whole process a lot easier, as the more recent software take into account

the complexities arising from the reconciliation problems of streamlining

spreadsheets and workbooks reporting structures. This will be helpful when

clearer overviews are needed to make accurate projections for the company.

Chapter

Including Budgets In Social The Plan

Business

Synopsis

Every business needs a social business plan template, and this will vary

according to the business style and direction the business is to take. For

some the use of social media tools would be an added advantage while for

others having the budget to have trainings conducted periodically on the

social business working s presents a better option. Either way any use of

budget for the social business platform should ideally bring forth positive

results.

The Social Side

Budget planning should be in line with the idea of providing all the assisting

skill to its work force to ensure the business entity is made into a successful

one.

As social strategies have proven to meet the most integral part of the business

direction, there is a definite necessity for this exercise to be included in the

budgeting plan.

The normal processes would include the maturing of the work force structure

in accordance with the social business style thus creating a better and more

functional force as the business entity grows from strength to strength.

The budget should ideally comprise of the following important component

which are the internal soft costs which is from staff, education and training.

The R&D sectors also get the relevant attention for the budgeting allocations.

When it comes to addressing customer issues there should be allocations for

marketing, blogger outreach and other assisting tools that would help the

business entity understand the customers grievances if any better.

As for the technological advancement, the budgeting provided for here

should create the possibility of having social media managements systems in

place or any other community platforms where engagement and interactions

can be done is a proactive way.

If there is an advanced social business budget in place, then other elements

can be addressed such as the shift of resources with the social business

initiatives that have to this point been done internally, to using external

assistance such as services and agencies that promote such facilities.

Chapter

Impacts Business Of Budgets

DebtsSynopsis

It may be rather surprising to note that there are some

debts that are considered “healthy” debts within the

frame of a business budget. These may include debts

incurred during the course of setting up the business

which are normally looked upon as investments but

are none the less debt incurring costs.

Debts

In the effort to keep these debts from becoming the focal point of the revenue

earning desired there are ways to limit its impact. When deciding to start a

business, the individual should take into account all the different aspects that

the business would have to focus on, and all the relevant tools it would need

to do so effectively and efficiently.

Once there is a clear outline of such needs then sourcing for these without

creating huge impacts on the actual budget available for the business would

be a good start.

Looking into possibilities of acquiring used supporting materials and tools,

cheaper yet effective ways of advertising, working out of a smaller and less

fancy environment, keeping overhead to a minimal, looking into tax reliefs

and rebates are just some of the actions that can be taken.

All these should be able to contribute positively to keeping the initial start up

cost lower, thus providing a healthy cash flow that would allow the business

entity to start off on a better footing.

If this is not possible based on the investments

necessary to get the business going then

other options need to be explored such as

working the business entity to its optimum so

that the investments will be justified and the

debts incurred will not be considered a bad

business tactic. Finding ways to maximize the

business engine to produce the desired

revenue at a much quicker pace will also

eventually allow the debts to be cleared or

brought to a minimum thus preventing it from

eating into the profits made.

Chapter

Managing Budgets Together

And Business

Finances

Synopsis

For many businesses, being able to find a balance between these two

seemingly similar elements can prove to be a rather uphill battle that

eventually spills over into the actual business survival itself.

Putting It Together

Most businesses especially the smaller start up ones, run into trouble soon

after its operations begin, due to a variety of factors all of which revolves

around finances.

For the enthusiastic business owner, the initial action of providing credit to

customers may end up being a very poor business decision that will cost the

business entity its future.

By this action the intention is to entice the customer to make a commitment

with the promise of eventual payment forthcoming. However this style does

not really help the business entity as a whole.

In order to start up the business, there may have been debts incurred which

require the servicing of interest, thus without some incoming revenue

immediately enjoyed, such debts will not be adequately serviced thus

incurring the possibility of even further debts and this will eventually be the

factor that falters the positive business growth.

To minimize this possibility, the business owner should have a strong

budgeting and finance allowance in place where all possibilities have been

explored and suitable actions have been designed to counter or address any

of the possible anticipated

problems. Elements such as

credit control systems should be

well planned and firmly in place

to ensure the business engine is

not compromised in any way.

Using the initial finances all

budgeting exercises should be

done in an in depth form so that

additional finances are not

needed nor encouraged.

Wrapping Up

Although some may argue, that getting into cash flow difficulties is not

unusual or catastrophic being able to avoid this would be a good way to start

and maintain a successful business. The important point to remember, is to

keep the budgeting exercise well within the finances available.