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.
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
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.
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 a tool that helps monitor the progress of the institution's expectation in enrollment, revenue and expenses.
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
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.
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
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.
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
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.
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
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.
Sounds like a practical approach. Ideally the use of copiers is going down in this trend towards paperless.
Not often. However, with our copier contracts, if we go over our contracted amount of copies in the alloted timeframe, we pay the same discounted price as we do if we stay within the contracted amount per copy. However, if we go to the next higher level to avoid going over, we lose the amount for the number we leave on the table. So, we under estimate and save.
Yes, budgets are always challenging and a must. Interesting about underspending. Does that happen much? When it does maybe the funds can be allocated to a project that wouldn't be funded but is essential. Thanks, Susan
A realistic budget is essential for any institution, large or small. The realistic budget keeps us from overspending and underspending while it helps to keep us focused on our overall goal(s).
Good point. That's why it is vital to plan and budget and keep assessing how you are doing. Also it is important to be realistic when budget planning. We suggest underestimate your income and overestimate your expenses. Thanks, Susan
A realistic budget should be the primary focus of any business, especially a small school. Without a realistic budget, the school can be in serious financial dire should it overspend without realizing it.
Hi German, You are right that a budget can drive the priorities of a school. It takes a lot of people and a lot of input to create an effective budget. And it takes continually assessing how you are doing. Most important to takes having every employee on staff work with the knowledge and understanding of being efficient to show that expenses are justified. Thanks, Susan
