CREATIVITY
# 116
Systematic Presentation Of
Operating Budget
Can Be As Important as What Is In It
Accepting the fact that the mathematical calculations and accurate projections are a “given,” the process being described herein is restricted to describing HOW to sell the final product. The first step involves Preparation and Education. Before the figures even reach the board of directors, it is important that all key members (board and committee chairpersons) are well informed in their areas of responsibility. Depending on the club, this could take the form of education by the general manager or by a process that involves each department head. The best, albeit time consuming, system involves the following steps. The General Manager draws up preliminary budget figures with each of the department heads (who have previously consulted with the employees in their department). Meetings are then held with the major chairpersons and the corresponding department head, along with the general manager. This is as much an educational process as it is a fact finding and approval process. The theory being that once you go to the board of directors or final budget committee for final approval, you have the support of those key to, and essential for, carrying the day. Guiding the Committee After each department head (or the GM for all departments) has presented their budgets, they must be consolidated in an overall report. The obvious would be to present a “proforma” P & L statement. Usually the bottom line is a deficit figure (everyone wants their pet projects included) and an orderly process must be taken to evaluate what is left in and what taken out. We have found that the best way to keep it orderly, and for the GM to guide the committee towards approving the essentials, is the presentation of a “shopping list.” Attach yearly dollar values to such items as $20 per month dues increase, close down the halfway house saves X number of dollars, etc. Presentation of this list allows an orderly system of review . . . ie, CUT this expenditure . . . ADD this amount to the monthly dues, etc. Psychology of Presentation Although most in the field agree that the chief executive officer or general manager needs to be the person making the physical presentation to the board of directors, there are times it is better to have a surrogate. Managers can be considered as having a special interest - a secret agenda, if you will - where the treasurer is looked upon as completely impartial and always having the club’s interest at heart. Unfortunately, this sometimes results in the uninformed (treasurer) presenting facts to the uneducated. Remedy? The general manager must have an overview or educational session with the treasurer. Stability is Essential Every committee chairperson and/or governing bodies in a membership owned club, tends to reinvent the wheel. Before getting to the actual budgeting process it is essential that stability be established. A budget/executive committee that turns over a maximum of 1/3 (it is better if at a 1/5 ratio) of its members per year. Continuity is essential also in the board and officers. Final Presentation Two more steps are necessary. The printing and mailing of the budget itself and the necessary preparations for a verbal presentation. The best verbal presentation is in abbreviated chart form. Cover all essentials, ie., by department, but do not get bogged down in details. If it takes over 45 minutes to present an $8 million plus budget, it is too long. If the treasurer makes the presentation, the GM should have all the facts placed in chart form and spend time reviewing the process with she/he, otherwise it is best the GM handles the presentation.