Flexing Your Budget: When Plans Change
In This Chapter
Using a budget to control your business
Looking at variances and their causes
Creating a flexible budget
In Chapter 14, I talk about how carefully I planned a cross-country camping trip with my sons. To tell you the truth, things didn’t quite go as planned, and my famed budget spreadsheet turned out not to be so accurate. A 30-percent increase in the price of gas added more than $1,000 to the cost of the trip. And although I had timed the trip to drive 600 miles per day, I didn’t take into account stops for coffee, restrooms, or motion sickness. Changes in time zones gave us three additional hours when driving west, which we lost on the way home. Worse yet, the kids didn’t care for my Power Rangers videos, a problem alleviated when the VHS player and offending videos mysteriously disappeared somewhere in Indiana or Illinois. Needless to say, this loss caused further expenses (a new DVD player and movie collection).
As my road trip attests, budgets don’t have to be set in stone. This chapter explains how to use flexible budgets to manage your business’s operations.
Controlling Your Business
Budgeting helps you plan ...