Preparing a budget may not be your idea of fun, but changing your mindset from number crunching to creativity can yield positive and profitable results. Budgeting is one of the most effective means of translating the policy of a facility into financial terms and, ultimately, the best measure of performance. Use these six steps when planning and preparing your facility’s budget.
1. Gain as much information and insight about how your department or facility fits into the overall goals of your organization. Not having a thorough understanding of your targets can be like golfing in the dark. Consider questions like, What is the purpose of your department? What role do you play? What are you expected to achieve? While these seem like basic questions, in this day of rapid change, the answers may differ from year to year.
2. Review your past programs and budget. Have programs met goals and been profitable? If not, why? Should the same programs be scheduled again? Can the programs be improved with a little creativity? Which programs should be discontinued? Which new programs should be started? A cost-benefit analysis is a useful tool to help you make these decisions.
3. Using your cost-benefit analysis, create cost projections for each line-item on your budget, such as salaries, equipment maintenance and locker room supplies. Follow your organization’s directions and format when putting the budget into its final form.
4. Solicit input from all staff members through their department heads. Expenses for each department should follow the principles of zero-based budgeting, so that department heads are encouraged to think about and justify what they are doing.
6. Sharpen your presentation skills. Depending on your situation, your skills and knowledge in presenting and defending the budget may mean the difference between approval and denial. Be sure your budget is submitted error-free and on time. Be prepared to explain each line item. As a manager, it is your responsibility to persuade people to believe in your views and accept your recommendations.