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PKF Texas – The Entrepreneur’s Playbook: A Budget Should Tie to Organizational Objectives

by | May 30, 2008 | PKF Texas - The Entrepreneur's Playbook®

Note: Running Fridays in FromGregsHead.comis a continuing series of tips brought to you by Greg Price. These run Saturday mornings during the BusinessMaker’s Radio Show on KPRC 950AM. Audio files can be found on the Entrepreneur’s Playbook page of the PKF Texas website.

Good budgeting is paramount organizational success. Jack Welch suggests the real world situations can be addressed if organizations are willing to tackle two key questions during the budget process: “How can we beat last year’s performance?” and “What is our competition doing and how can we beat them?”

Most companies have some type of strategic or tactical plan that tries to answer those questions. But the real difference is how many also link their budget to the answers to those same two questions? If you plan only addresses costs and revenues, you are probably going to come up short on the outcome at the end of your year. Your plan was not a good one. You need something else.

Budgeting needs to be linked to your strategies and organizational goals. Otherwise your competition will be getting the jump on you.

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