Can a Realistic Budget Affect Growth?
How does a realistic budget provide a platform for a school’s growth projections and revenue targets? What are the components of an effective budget?
A realistic budget can affect growth by ensuring that before decisions for change are made that there is enough money to support the change. The component of an effective budget begins with a sufficient and detailed marketing budget which is designed to reach the "ideal students" in sufficient quantities to reach the expected enrollment. The other components of an effective budget are expected revenue and expected expenses. The budget will be clear and detailed about how these expected revenue and expense numbers were reached so that stakeholders can determine if the estimates are reasonable.
A realistic budget serves as a great guideline for a schools growth projections and revenue targets. Components of an effective budget is comprehensive and detailed historical and current data in many areas so that reasonable evaluations, expectations, and determinations can be made with the projection/creation of the budget.
Roselyn,
This sounds great although there are many approaches. Having a 20% contingency does help to head off mis judgment. The goal is to have everyone involved in the budget and planning process. Then have everyone agree to commit to and and follow it. Frequent meetings are important to determine how everyone is doing and what changes might need to be made.
Thanks, Susan
Dr. Susan Schulz
A Realistic budget includes projected student population growth by program, anticipated operating expenses to appropriately provide the product that you are delivering, additional expenses that are expected with growth projections and also at least a 20% extra to account for the unplanned unexpecteds.
All staff must be held accountable to ensure that their department stays within budget and perhaps bonuses to those that do.
marissa,
Very well said. Budgets are important to run any organization. Most regulatory agencies with career school oversight require budgets. Budgets keep everyone on track and working towards common goals. Frequent assessment to determine how you are doing keeps everyone on track. It's a win for everyone. Thanks, Susan
Dr. Susan Schulz
Some complements of an effective budget include specific details with specified targets, benchmarks and frequent visits. In order for your school to thrive, setting s realistic budget is key. It is not unrealistic for each department to have a budget or goal if applicable.
Roselyn,
We agree. A budget is an important part of a Plan. It reflects what you want to look like in 3 to 5 years and what it will take to reach these goals. A budget can be measured and help point to successes and areas for improvement. It guides staff on what to do and where the priorities are. It's amazing how an organization can be run without a Plan. Thanks, Susan
Dr. Susan Schulz
A realistic budget provides a map for the school to meet the goals for their plan. It should include the projected population growth, anticipated expenses for both staff, campus and students. There should also be an amount allocated for growth and all departments must adhere to their budget allowances with out exceeding.
Carrie,
You are right. A budget reflects your Plan and does need to be monitored and managed. We are so glad to hear the results of your structured Plan. What is important is that your entire Team is involved in the planning and management and are held accountable for areas that relate to them. In addition, it is important to have a strategy for change and improvement. Often as you work the Plan people see better ways to get results. Thanks, Susan
Dr. Susan Schulz
Creating, monitoring, and managing a budget is the key to success and growth. Budgeting is the most effective way to stay on track. You must have a clear picture of where you currently stand and where you expect to stand over the next five years. In our school, structured planning has made the difference in growth and success. Planning has allowed us to create a focus for direction and has given us a greater ability to make continuous improvements and anticipate problems. This eliminated many of our growing pains. We have learned that departmental budgets are essential tools for planning our strategy and action plan.
Michelle,
This is so well put. Thanks. Yes, a budget is the underpinning of a school and helps it run effectively. A budget helps make things happen and is a form of measurement and accountability. A budget gets staff thinking creatively. If they want to make something happen, what innovations are needed to, especially when there are budget constraints. It's great to get all staff involved and aware of the budget. thanks, Susan
Dr. Susan Schulz
A realistic budget provides a platform for school growth by giving direction to the individuals who make up the organization. An effective budget considers where the organization is financially, where it needs to be and how much it will cost to get there. It should include salaries for current and new staff, marketing, supplies, rents, utilities, cleaning and maybe more depending on the size of the school. Once the budget is in place it is easier to identify controllable expenses to help answering the "where are we" questions easier.
Aaron,
Realistic budgets take the involvement of everyone on staff. It's a challenge in every organization. The goal is to budget effectively and have strategies in place for constant monitoring and change. The reality is we never plan effectively and things end up costing more than planned. 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.
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
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.
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 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.
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
