1. What is the hardest thing when managing a budget?
2. How do you assess what needs to be covered in your budget?
3. How do you develop a plan for your budget?
4. How do you implement that plan?
5. What is the process of evaluation of your planned budget and its success?
I had the opportunity of interviewing the owner of a small accountant firm. It is just him in the company so his budget planning and keeping is unique in the sense that he has only him to rely upon actually making and keeping that budget.
I first started off by asking him the question of what is the hardest thing when making a budget. He felt that due to the fact that it was only him working in the company that he had to be self disciplined with actually sticking to the budget that he sets out for himself each month. When its only him he has to be extra careful that he is actually sticking to the budget in order for him to not start losing money each month.
I next asked him the question of how does he assess what needs to be covered in his budget. His response to this question was a lot of the basic things like rent, utilities, paper supplies, gas for traveling, phone bills, and things of that nature. And then if he knows ahead of time that something extra or big needs to be bought like maybe a new printer or something like that, then he will plan a couple months in advance for those extra expenditures.
The next question that I asked was how does he develop a plan for his budget. Again a lot of the budget that he makes each month are already built in things that have already been mentioned. But what he will also do is analyze at the end of each month up coming events and situations that should occur and then he plans according to those things. It also greatly depends on the time of the year. During tax season he knows he can be a little bit more flexible with the budget because he will be bringing in much more money than at other times of the year were he needs to be more frugal and careful with his budget.
The fourth question that I asked him was how does he implement his planned budget. Again with him being the only one at his work it really is just up to him in implementing the budget. He makes sure that he has sufficient funds each month to be able to take care of his monthly bills then he tries to make sure that he has a surplus of cash as well in case unexpected things come up so he can cover them.
Finally, the last question that I asked him was what was his process of evaluation of his planned budget and its success. This as well was a pretty basic and easy thing for him to do. Really if he was able to stick to that budget and not go over it he felt it was a success. And if he went over it and it was for unnecessary reasons then he felt it was not successful and he tries to go back and figure out what he can do better in the future.
In the end I thought it was nice to be able to see the perspective of a small business owner that he was the only employee, and the things that he has to deal with instead of a large corporation. I certainly think that there are pros and cons and different things that he has to deal with that the larger companies to have to deal with.