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The Zero Based Budget

by HAL | June 02, 2020

 

There are so many requirements and needs for someone to be a true, quality, effective, realistic, responsive and responsible leader, that we often pay insufficient amounts of time on some of the rather – mundane ones.

After more than four decades of involvement in nearly all areas of leading and leadership planning, from identifying, qualifying, training, and developing thousands of actual or potential leaders to consulting, and serving as a leader on various occasions for a variety of types or sizes of organizations (both for – profit as well as not – for – profit), I have become concerned how few pay sufficient attention and time in understanding the need for and value of a budget! Even though most groups prepare budgets, not enough of these are prepared in a way which makes them as valuable as they should be.

Budgeting doesn’t mean simply putting some numbers on a piece of paper and ignoring them, but when done properly, should become one of the most effective planning documents/ guides. To do so, use a zero – based budget, which means, every line item should be evaluated and considered from the perspective of its relevance, quality, etc.

With that in mind, this article will attempt to briefly consider, examine, review, and discuss 5 benefits of this process.

  1. Bigger – picture: Instead of becoming overwhelmed by the current obstacles and pursuing ill – conceived Draconian measures, it’s important to focus on the bigger – picture! What might be the ramifications of certain behaviors, strategies, and/or, actions? How can the group’s monies be better expended in order to create more bang – for – the – buck in an organized item – by – item way?
  2. More relevant: Just because it’s always been done that way, doesn’t mean there might be a better way, to proceed forward! Since times evolve and change, planning must evolve by focusing on how each expenditure is either well – spent or might be better expended. This is a necessity of maintaining a relevant, sustainable organization!
  3. Examine possibilities: Don’t consider obstacles as problems, but rather see them as challenges to overcome. Look at what’s possible and a good idea, and how to best prepare financially to create the best scenario!
  4. Better bang – for – the – buck: Shouldn’t a leader’s goal be to create better bang – for – the – buck, on a consistent basis? Every line item should be considered and carefully evaluated to see if it’s necessary or not, or if more, the same or less should be expended in the coming year!
  5. Responsible allocation of funds: Leaders are responsible for properly allocating the group’s funds. How one does so on a regular, organized, and consistent basis often makes a significant and meaningful difference!

Make your budget a meaningful living document and you’ll become a far better leader!

Understand and use a zero – based budget so you might become more responsible, responsive, and a better leader!

Written by:

Richard Brody

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