In this video, learn why it's important to understand what the business does first, prior to building a budget.
- [Instructor] Too often, I see people attempt…business budgeting without first taking the time…to understand exactly what it is that the business does.…Did you know that this can lead…to a business budget model being developed…that doesn't reflect the nature…of the business's operations?…We really want to avoid this.…So let's talk about why it is important…to first understand the business…before we start building the business budget model.…Simply put, we need to understand what drives the business.…That is what are the bills that need to be paid?…We're talking about staff costs, lease costs…and that type of thing.…
We also need to ensure that we don't miss…any key budget inputs,…and this is something that happens all too frequently…as it's easy to forget about ad hoc and annual expenses,…such as insurance and marketing costs.…We also need to understand what it is that drives revenue.…That is what are the products and services…that will be sold to generate income?…And we also need to understand the relationship…
- Identify why it is a good idea to use Excel when creating a business budget.
- Examine the importance of revenue drivers when putting together a business budget.
- Recognize how to calculate staff costs when creating a business budget.
- Explore the elements of preparing a concise report.
- Break down the fundamentals of enhanced reporting.
- Determine the best ways to utilize efficient updates.