Unformatted text preview: u included in the market analysis table. CHAPTER 13: EXPENSE BUDGET Budgets are plans. They are spending plans, activity plans, sales plans, marketing plans, all linked to the
disciplines of careful projection and resource allocation. Simple Math, Simple Numbers
The expense budget is built on common sense and reasonable guesses, without statistical analysis,
mathematical techniques, or any past data. The mathematics are simple; sums of the rows and
In the example below, each line of expense occupies a row, and months and years occupy columns.
The Total expense row sums the individual monthly expense columns. The annual expense column
sums the months for each row, including the Total row. SIMPLE EXPENSE BUDGET As you develop a budget, think of it as the part of your plan you can most easily control. Consider
your plan objectives, your sales and marketing activities, and how you’ll relate your spending to your
strategy. Remember as you budget that you want to prioritize your spending to match your priorities
in sales and target marketing. The emphasis in your strategy should show up in your actual detailed
programs. That’s your budget.
An expense budget can be as simple or complex as you wish. Greater detail in your plan will give you
more information about, and more control over, how you spend your money. HURDLE: THE BOOK 13.2 ON BUSINESS PLANNING Budgeting is About People More Than Numbers
While budget numbers are simple, budget management isn’t. To make a budget work, you need to
add real management:
1. Understand that it’s about people: Successful budgeting depends on people management
more than anything else. Every budgeted item must be “owned” by somebody, meaning that
the owner has responsibility for spending, authority to spend, and the belief that the spending
limit is realistic. People who don’t believe in a budget won’t try to implement it. People who
don’t believe that it matters won’t worry about a budget either. 2. Budget ownership is critical: To “own” a budget i...
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This note was uploaded on 01/26/2014 for the course BUINESS 102 taught by Professor Unknown during the Winter '09 term at University of Phoenix.
- Winter '09