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Al Budget
 

Al Budget

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Budget 101: It’s always important to watch your departmental budget, but during tough economic times, you’ve got to watch it like a hawk! In this Amazing Leadership podcast, Roy provides basic ...

Budget 101: It’s always important to watch your departmental budget, but during tough economic times, you’ve got to watch it like a hawk! In this Amazing Leadership podcast, Roy provides basic budget information to get you started on managing this key information.

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    Al Budget Al Budget Presentation Transcript

    • Amazing leadership
    • Additional resources are available at http://www.amazingleadership.com contact: roy@amazingleadership.com or @rgatling on Twitter
    • Budget 101
    • As a business leader, you manage: -People -Planning -Problems (not always in that order!)
    • Budgeting is part of planning. Failing to Plan equals Planning to Fail
    • Typical budget is month-to-month for 1 year AND quarterly long term (3 years)
    • Two basic budget elements: - Income (sales) - Expense (rent, salaries, taxes)
    • Income is based on sales. If you are in a department that does not generate revenue, you are in a cost center.
    • Expenses can be: - Fixed (rent) - Variable (travel)
    • Expenses are grouped as: -Cost of Goods (COGS) -Operating Expense (OpEx) -Capital Expense (CapEx)
    • COGS is the expenses incurred in the manufacture of a product. This includes direct labor, materials and overhead.
    • OpEx is on-going cost for running a business. - Advertising - Telephone - Salaries -Taxes - Insurance - Depreciation
    • CapEx is cost to buy fixed assets or to add to value of an existing fixed asset. Assets typically in use for at least one year and not for resale. - Computers - Vehicles - Test Equipment
    • Create budget showing existing/projected sales and expenses.
    • KNOW your budget and review it monthly. Monitor OpEx CLOSELY.
    • If revenue is decreasing, you must decrease expenses at a faster rate. Compare the growth of your income to growth of your expenses monthly.
    • 3000 2250 1500 750 What do 0 Income Expense your 2000 numbers 1500 look like? 1000 500 0 Income Expense
    • Review your budget with your team as appropriate. Ask them for ideas and help in reducing expenses.
    • Meet with your Finance rep or accountant regularly.
    • Know your numbers. Watch Revenue & OpEx. Manage expenses AGGRESSIVELY.