Sounds like a practical approach. Ideally the use of copiers is going down in this trend towards paperless.
A realistic budget provide a views to the company about what they need for the future. Prepare the company to evaluate all the areas like an operating expenses, facilities, faculty and some other expenses as a result of the goals completed.
MIRIAM,
Good point. It is all about the budget. First a reasonable budget has to be put in place. Then the budget has to be watched to be sure you are not overspending. Then your team has to review income and expenditures to decide how to stay on track and how to deal with budgetary surprises. thanks, Susan
Dr. Susan Schulz
Realistic budgets help ensure the growth of the institution. With continual over or under spending, the instutional will not be able to be efficient. Each department manager needs to be held accountable for the budgets they are given to ensure the financial health of their departments and to learn financial responsiblity of the business. This includes not just the financial end, but also retention budgets of the departments, start budgets, etc.
Janet,
Very interesting. Yes, budgeting is critical.This includes goals for making money and saving money. Maybe recognition should be given to staff who not only keep within budget but do so creatively (and of course ethically.) Perhaps we should motivate them to say when too much funding is allotted or too little. It's the people in the ranks who really have a lot of information and it is important to get them to share. Thanks, Susan
Dr. Susan Schulz
A Budget can affect growth in many ways:
1. It can increase or decrease in accordance to demand versus results.
2. It can be focus in a variety of marketing versus capital investments as needed.
3. It can be be used to promote the quality of education toward our students, faculity, and staff.
Above all it must be flexable enough to support the school's MISSION and GOALS.
Arthur,
Good points re budget. Mostly budgets are a challenge! However, they are a necessity and help everyone measure how they are doing - at least what they determined was needed and what they actually spent. Budgets help to evaluate return on investment - another way to measure how you are doing.
Dr. Susan Schulz
Yes a realistic budget can affect growth. By using realistic information in the budget executives will have a better understanding of growth potential and whether the growth plan will work. A budget should be specific and should identify all costs associated with running the institution. Managers should be aware of the budgets and should review them regularly to ensure the growth plan is on track. Elements in a budget include prospective enrollment figures, operating costs, pro-forma income figures and a little extra for unforseen expenses. Budgeting is a long process that should involve analyzing previous budgets and using the best information when projecting future needs.
Eric,
Sounds like you have great experience with planning and working budgets. They are great tools when used effectively. Budgets get everyone thinking about efficiency, productivity, and return on investment. When they ask for funds to run their departments and special projects staff will know to present data and facts. Also results and trend. They learn to watch for everything to measure. Thanks, Susan
Dr. Susan Schulz
A realistic budget is a tool that helps monitor the progress of the institution's expectation in enrollment, revenue and expenses.
PATRICIA,
Very well put. We think the value of a budget is also in the process. It takes a Team to work together to set goals in all areas that a school is measured on. Then it takes a team to prioritize and set budgets. Budgets are easy to check regularly and quickly indicate how things are going. Budgets help make changes to accomplish goals. Thanks, Susan
Dr. Susan Schulz
A realistic budget is the outcome of careful planning and research. Market research must be completed to gauge the "market need" for your type of training and before you add any more programs. Facility size is also a factor. Are you locked in a lease with no room for expansion for 5 years?
I believe that revenue projections are the first component of any budget. Then, what are the basic expenditures needed to obtain those projections (salaries, utilities, books, etc). Then I would go on to marketing. Do I need to increase my marketing to attain that revenue. After addressing all operational areas I would go on to capital expenditures. Do I need additional equipment to handle the projected increase in revenue? I am also a firm believer in working a contingency amount in any budget. The unexpected can and usually does happen.
Jan,
We totally agree that before offering any new program two questions have to be answered: Is there a need for this training and will there be jobs for grads now and in the future. Revenue projections are of course important as it helps to answer the questions - what is this all going to cost and when and what is the expected return on investment. All the information helps to make a decision about if and when to offer the programs and how to fund them. Regulatory agencies typically want to see this information and more before granting approval. Thanks, Susan
Dr. Susan Schulz
Realistic budgeting may limit your growth to a slower pace, but that can be a good thing!In order to reach one’s goals, there must be a plan. A budget is your guide to be able to make informed decisions about your schools future. The benchmarks we set in our program are designed to be realistic and allow us to grow or to maintain quality in our educational standards. Here at the college, some benchmarks are set for us, depending on the classroom enrollment standards set for all classes. Career technical classes have a different component and structure than other classes on campus. We must be realistic about our growth and manage it well to avoid the pitfalls of success. Too much of a good thing can put our entire program in crisis.
Effective budgeting is all about knowing your objectives, your resources, and creating an achievable budget. This effort takes time and cooperation. Understanding all of the components of your massage program helps you to carefully consider all of the areas that may influence the approval of your proposed budget. Without the money to fund good instructors, keep the lights on, and create a positive relationship with your vendor, growth projections are only words on the paper.
Stephanie ,
Yes. a budget is a guide or road map. And like any map sometimes you have to change directions. The focus is on having a goal and a route to get there. There are rest stops where you ask - how are we doing? Let the information guide you. People are often afraid of a budget because it might point to all the wrong things and failures. The reality a plan and budget can also show where you are doing well and even exceed expectations. Thanks. Very thoughtful. Susan
Dr. Susan Schulz
A realistic budget dictates the nuts and bolts of any business plan. Without this budget a company is working in the dark and even more importantly cannot access success.
Jeanette,
We agree. A budget is one of many tools needed to successfully run any organization. It's a tool to measure how you are doing and to indicate what changes need to be made. It's a guide and not a rule book in our opinion. Thanks, Susan
Dr. Susan Schulz
A real budget provides the guidance for the school to set its goals for the length of time it needs to analyze. Be it a one year plan or Five year plan. It should project all campus metrics from student population growth by program, all anticipated operating expenses and capital expenses. A financial number must be tied to all elements of your plan to ensure you have the resources needed to carry out the plan.
Mario,
Good points. There are many ways to develop and use a budget and plan. It depends on who is doing it and who will implement the plan and be measured by it. We believe in the concept of five year planning. It gets a lot of ideas on the table and gets everyone on the same page. Then we think that the plan should be worked within short periods of time - perhaps month to month or quarterly. At each juncture it is important to ask - how are we doing? Where can we do better? What changes have to be made? Are our goals still possible? It can be this simple and have a powerful impact. Thanks, Susan
Dr. Susan Schulz
Reality in budgeting when planning for growth will help a school make real assumptions for cash flow and plan for financing if it will be needed. You must consider all things when developing an effective budget.
