Ideally, every line in a budget is assigned to somebody who is responsible for managing that budget. In most cases you'll have groups of budget areas assigned to specific people, and a budgeting process that emphasizes commitment and responsibility. You'll also need to make sure that everybody involved knows that results will be followed up. The ideal plan relates the budgets to the Milestones table, discussed in Strategy and Tactics: Make it Real. The Milestones table takes all the important activities included in a business plan and assigns them to specific managers, with specific dates and budgets. It also tracks completion of the milestones and actual results compared to planned results.
The Milestones Table
These are the milestones, the heart and core of the business plan. Using the Milestones table will assign responsibility and authority to the expense budget plans.
Regardless of which budget style you choose, you make very important choices as you plan your profit and loss. This is where you plan your expenses. You are estimating expenditures across the business, from rent and overhead to marketing expenses such as advertising, sales commissions, and public relations. Decisions you make here are as important as the mathematics are simple. Your sum of expenses ultimately determines your company's profitability. This is the business plan equivalent to budgeting, as you set your sights on the levels of expenditures you expect your company will need.
Copyright © Timothy J. Berry, 2006. All rights reserved.