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How to Make a Budget Plan Your Association Can Stick To

Your association can use a budget plan to organize finances and look for new ROI opportunities - setting yourself up for future success.

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Let’s be honest, your association could use a way to save a few extra bucks. No one likes to waste money, it’s just fact. And your association has a lot to worry about when it comes to funding- events, conferences, and projects take a lot of revenue and resources to create for your members!

According to Statistic Brain Research Institute’s statistics on business failure rates, one of the top reasons a business fails is because of incompetence - more often financial incompetence. Staying on top of the ball when it comes to finance is essential for any association. Letting your revenue go ignored can lead to wasting money, missed opportunities, and in the worst case- the failure of your organization. This is where the value of a well-managed budget comes into play. Budget planning is one of the best moves your association can make. It ensures financial security in months where your association is spread thin and usually stressed about revenue streams. It also allows you to see exactly how your association’s revenue is being spent. This could show flaws in your revenue plan and help you better manage where your revenue should go in future budgets.

So, it’s clear your association needs a budget. But where do you start? If you’re wondering how to make a budget for your association, we’ve got you covered. Here are some tips on how to make a budget plan you can actually stick to.

Why have a budget?

If your association has never made a budget plan before, you could be wondering why it should start. What’s the big deal anyway?

Well, what if we told you a budget could help you predict the future for your association? It’s true. A budget is essentially a fortune teller for the financial success of your association. It predicts how your finances will help you achieve the goals you have set for the year based on how you spend and collect revenue. In fact, a budget is better than a fortune teller. It runs based on factual evidence of money spent and money received. If you plan your budget right, it’s virtually impossible to miss any financial missteps or mistakes.

A budget also helps you plan long-term. You can create multiple budgets for your association based on the length of time you’re looking to plan for. Many associations have a 1-year, 3-year, and 5-year budget in order to keep things moving towards the future. Need any more reasons to want a budget? They also help you create realistic goals for your association.

With a budget, you can see exactly how much revenue you have to spend on future projects and goals. This in turn gives you the insight needed in order to create realistic plans. Need to know how much money it will take to make your association’s dream project come true? Just budget it out.

To put it into simple terms, a budget plan can keep your association on track every single month. What’s not to love about that?So, if you’re convinced that a budget plan could do your association wonders (and it could!), here’s how to get started on creating a budget plan:

What goes into a budget

When it comes to budgeting, you always want to start with the “what” factor. What are you going to include in your budget? What is the most valuable information to track?

For any budget, you always need to cover the basics: Incoming revenue, organization expenses, and the resulted profit. However, when you budget, you always want to make projections before your final numbers come in. This will help your association make an estimated guess on how much profit it will make for the month, leaving minimal room for surprises at the end of the month.

These projections will then be measured up to actual revenue, expense, and profit numbers. If these numbers are vastly different, it should tell you that your association might not be performing at its best when it comes to gaining profit. Or, it could mean your association has unrealistic projections and needs to adjust for the next month. Creating projections will give your association’s team a goal to work towards all the way up to the end of the month.

Once you have your projections set out, you can start to create a plan from these numbers. Looking at your projections, your association should come up with a set of goals for its team to reach at the end of the month. This could relate back to sales, non-dues revenue increases, or cutting back on expenses. A great way to enforce these goals is to have an incentive at the end of the month. You can award the top-performing team member an award or a prize. This will keep everyone on your team striving towards these budget goals. Now that we’ve got the basics covered, let’s get into some other key aspects of your association’s budget.

Look for room to grow

Once you have your budget plan hashed out and you know the basics of where your money is going, it’s time to take it a step further. By looking at your projected and actual profit for the month, you can make inferences and start to look for new ways to get a larger return of investment (ROI). This is where creativity is key for associations. Gather your team together and brainstorm ideas on how to see your ROI grow. Are there more valuable benefits you could be offering to members? Are you exhausting every source possible for non-dues revenue growth? There are a variety of ways to increase ROI for your association. You can incorporate new technology, create new events, or even incorporate a job board into your association’s website (find out more about Web Scribble’s job board software and how it can work for you!)You also need to create both long term and short term plans. If there’s revenue that can be made in a short amount of time, you don’t want to miss out on it by only planning long term.

Budgeting made simple. Creating a budget for your association is a no brainer when it comes to future planning and success. By projecting profit goals for your association and using your budget to track your work, you can strive towards bigger moves. And by keeping track of your association’s finances, you don’t have to be worried when setbacks arise. Planning for the future doesn’t have to be a hassle. Your association can use a budget plan to organize finances and look for new ROI opportunities - setting yourself up for future success.