22 min
GIP15 Budgeting for Landscape Business Owners in our Series on Finance Business Growth Radio - Solutions on Demand
-
- Business
The last Green Industry Pros podcast (GIP14) covered Accounting & Invoicing with a reference to ABC or Activity Based Costing. Putting together an effective budget doesn’t require ABC but sure helps. We start this discussion with the types of budgets available to a landscape business owner and then focus on where to start. One last thought, a budget has two demands to be effective: accuracy and forecasting.
Types of Budgeting Systems.
Traditional: created for a period and uses the previous year as a starting point.Zero-based: every year starts from scratch. Last year provides insights but instead you start at zero.Flexible: ongoing adjustments based on sales forecasts and the impact on production projections.Rolling: it takes a year long view and at the end of every period (a month or quarter) it is dropped and a new month or quarter is added to maintain a 12 month budget.
Start with either the Traditional or Zero-based System, then as your competence and confidence increases move to Flexible and Rolling Budgets.
Now the question moves from the system to its use. This is a quick overview, and we choose the choices most appropriate for small landscape companies.
Your Options: Master budget, Operating budget, Financial budget, Cash budget, Labor budget, Capital budget, and Strategic. Our recommendation is to start with the operational budget and then add the cash budget.
The last Green Industry Pros podcast (GIP14) covered Accounting & Invoicing with a reference to ABC or Activity Based Costing. Putting together an effective budget doesn’t require ABC but sure helps. We start this discussion with the types of budgets available to a landscape business owner and then focus on where to start. One last thought, a budget has two demands to be effective: accuracy and forecasting.
Types of Budgeting Systems.
Traditional: created for a period and uses the previous year as a starting point.Zero-based: every year starts from scratch. Last year provides insights but instead you start at zero.Flexible: ongoing adjustments based on sales forecasts and the impact on production projections.Rolling: it takes a year long view and at the end of every period (a month or quarter) it is dropped and a new month or quarter is added to maintain a 12 month budget.
Start with either the Traditional or Zero-based System, then as your competence and confidence increases move to Flexible and Rolling Budgets.
Now the question moves from the system to its use. This is a quick overview, and we choose the choices most appropriate for small landscape companies.
Your Options: Master budget, Operating budget, Financial budget, Cash budget, Labor budget, Capital budget, and Strategic. Our recommendation is to start with the operational budget and then add the cash budget.
22 min