fbpx

How to budget for your company so you can grow forever

The problem with zero based budgeting

Draw down budgeting has both pros and cons

Be aware that zero based budgets have the power to both increase and decrease creativity in your business.

On one hand, people’s creativity is sparked because they have to justify their expenses and will likely be asked to do more with less. On the other hand, zero-based budgets can turn into a game of getting as close to zero as possible. If that happens, everyone will look for any reason to cut an expense instead of looking at the value it gives to the company.

To avoid a creativity decline, give your team some time beforehand to look at how each expense creates value for them. That way you avoid the issue of someone feeling pressured if they can’t come up with an answer on the spot – accidentally cutting an expense that provides value in a unique way.

Continue the article on the next page…

Leave a Reply

Your email address will not be published. Required fields are marked *