The Business Budget

The budget is the first year of the business plan.  

When the business plan is made, it's usually forecasted by year for five years.  The first year however, is forecasted by month.  The reason is this is then our new plan for the next year.

The business plan is usually not too far from the start of the new-year, so the first year of the plan should have fairly recent projections. 

Some things always change, so these things are noted and will be analyzed.

• The income statement by month

• The sales by platfrom, product or service

• The cost initiatives for the year

The business units are usually held to the numbers in the business plan. 

Any variances between the plan and actual results usually need to be explained, both good and bad. 

For the new year it is necessary to start the cost reduction plans immediately.  If you wait, it will be too late.  A cost reduction roadmap should be used and includes:

• Each project in detail

• Who is responsible

• Start time of the project

• Cost savings by project and how savings will be measured