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Cards (137)

  • Timing tactics deal with when a company implements a strategy
  • Market location tactics deal with where a company implements a strategy
  • A budget is a quantitative plan prepared for future projections of sales, expenses, and earnings
  • The budget process begins after programs and tactical plans have been developed
  • Planning a budget is the last real check a corporation has on the feasibility of its selected strategy
  • Top-down budgeting
    Developing budgets where top management outlines overall figures and middle and lower-level managers plan accordingly
  • Advantages of top-down budgeting
    • Top managers have comprehensive knowledge of the organization and its environment, enabling them to set budget targets for each department to meet the needs of overall company revenues and expenditures
  • Bottom-up budgeting
    Developing budgets where lower-level and middle managers anticipate their departments' resource needs, which are passed up the hierarchy and approved by top management
  • Advantages of bottom-up budgeting
    • Specialized knowledge of operating managers about the environment and marketplace is utilized, involving a mixture of both top-down and bottom-up styles
  • Types of budgets
    • Operating Budgets
    • Capital Expenditures Budgets
    • Financial Budgets
  • Operating Budget
    A statement presenting the financial plan for each responsibility center during the budget period, reflecting operating activities involving revenues and expenses
  • Types of operating budgets
    • Expense Budget
    • Revenue Budget
    • Profit Budget
  • Expense Budget
    Documents expected expenses during the budget period, evaluating fixed, variable, and discretionary expenses
  • Revenue Budget
    Identifies the revenues required by the organization, projecting future sales
  • Profit Budget
    Combines expense and revenue budgets into one statement to show gross and net profits, used for final resource allocation and financial performance evaluation
  • After divisional and corporate budgets are approved, procedures must be developed, often called Standard Operating Procedures (SOPs), detailing various activities
  • Developing procedures after divisional and corporate budgets are approved
    1. Develop procedures, often called Standard Operating Procedures (SOPs), detailing activities to complete corporation's programs and tactical plans
    2. Update procedures to reflect changes in technology and strategy
    3. SOPs are brief, easy-to-understand documents showing action points and workflows
    4. Create process flowcharts for performing defined tasks
  • Standard Operating Procedures (SOPs)

    • Primary means by which organizations accomplish much of what they do
    • Define expected practices in all businesses with quality standards
    • Policies, procedures, and standards needed in Operations, Marketing, and Administration disciplines within a business
    • Ensure efficiencies, profitability, consistency, reliability, fewer errors, conflict resolution, healthy and safe environment, protection of employers, roadmap for issue resolution, first line of defense in inspections, value added to business
  • Developing an SOP is about systemizing all processes and documenting them
  • Every business has a unique market, every entrepreneur has his/her own leadership style, and every industry has its own best practices. No two businesses will have an identical collection of SOPs
  • Developing a budget for your small business helps you keep on track with spending, saving money, and tracking income streams
  • Following a budget or spending plan will help you keep your plans on track
  • Managers use periodic statistical reports to monitor and evaluate nonfinancial performance. These reports include the number of new customer contracts, delinquent accounts, sales volume received, number of employees, and other vital statistics