By Cathy Yen
The President just confirmed zero raises for civilian federal employees in 2019. "Federal agency budgets cannot sustain such increases," he wrote.
Budget season means setting priorities and making difficult choices for any organization.
Last week, Village of Oak Park staff began sharing 2019 budget priorities with elected officials and the public. Over the next few months, the list of "wants" will be whittled down to "needs" plus "what else can we afford?"
At the Chamber, we are planning for 2019 as well, through intense scrutiny on what services we provide, what we charge, what we spend and how we are organized. Happens every year.
As with all nonprofits, oversight of our budget and the strategy that underlies the numbers belongs to the Board of Directors. That requires a process requiring discussions, analysis, compromise, plans and ultimately approval. Also common to nonprofits - we focus on cultivating the right mix of funding, revenue and costs in order to provide the services consistent with our mission.
Budgeting is a fact of life for most organizations and a skill I honed in my corporate life. Budgeting helps you put numbers behind your intentions, create goals you can measure and set limits on spending. It also gives you the opportunity to analyze how your business is doing using industry standard ratios: sales per square foot, profit margin, advertising or rent as a percent of total sales, cost of goods sold, productivity and efficiency.
Admittedly, budgeting can be as fun as flossing, and definitely requires conquering any fear of math. Still, I was surprised to learn how many small businesses avoid it entirely.
A budget is a road map, not a detailed itinerary. It helps you stay focused, make high level choices and allocate resources, even if it does not tell you how to manage daily operations. And, yes, things will change. Rarely do things work out exactly in line with the budget. That does not obviate the value of exercise.
A good budget, supported by a focused strategy, provides context for the goals you want to achieve. And, the budget acts as the catalyst for the even more important conversation about the goals themselves.
Answer Book 2018
To view the full print edition of the Wednesday Journal 2018 Answer Book, please click here.
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