You also have a high level of commitment from your

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Unformatted text preview: tem is to have the authority to spend, and the responsibility for that spending. 3. Budgets need to be realistic: Nobody really owns a budget item until they believe the budget amount is realistic. You can’t really commit to a budget you don’t believe in. 4. It’s also about following up: Unless the people involved know that somebody will be tracking and following up, they won’t honor a budget. Publishing budget plan vs. actual results will make a world of difference. Rewards for budget success and penalties for budget failures can be as simple as peer group managers sharing results. The Budgeting Process Here’s a simple step-by-step way to increase the importance of budgeting and implementation within your business. 1. Budget preliminary meeting: Start your budgeting process with a preliminary meeting that brings your main managers together. Discuss strategy and priorities, realistic amounts, and the planning process. Distribute a simple template and ask each manager to prepare a proposed budget for his or her area. Ask the managers to create a proposal that includes monthly numbers, and descriptions of the programs and activities involved. 2. Budget development: Allow a period for managers to develop their budgets, working with the standard template. Enforce deadlines for preliminary proposal and revisions. Consolidate the proposed budgets into a single budget table that lists all of the proposed programs and activities. In most cases the total of all proposals will be 2-3 times the real amount your company can spend. Share that consolidated table with all managers. Share with them the difference between proposed budgets and actual spending limits, and ask them to think about it. 3. Budget discussion: Bring your managers back together to discuss the budget table. Ideally you set up a conference room with a projector and the consolidated proposed budget. Then you go through the budget, item by item, and pare it down to a realistic amount. Your managers will be together in a group, so they will have t...
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