View more on these topics

David Shelton’s business tips: Budgeting for a merged business

David-Shelton-MM-Peach-700.png

If you are setting the budget for a recently merged business the range of issues may well call for zero-based budgeting. You would not automatically assume you need all the resources of the combined businesses or that the current ways of doing things are right for the new company.

When constructing a cost budget, you should ask the following questions:

  • What am I going to get for this item of expenditure?
  • What will we actually do with this part of the budget?
  • Have we factored in inflation?
  • How will this extra expenditure affect clients?
  • What percentage of the budget did this account for three years ago?
  • Did we spend the total budget for this item last year?
  • Why did this part of the budget overrun last year?
  • Does this extra expenditure give us a clear increase in productivity?
  • Is this line an “investment” or a “cost”?
  • If we had to lose 10 per cent of the total, where would it come from?

These are all ways to test the thinking behind the budget, even if you have a one person business. It pays to be inquisitive. Always consider how you would justify an item in the budget being the same as the previous year plus inflation.

David Shelton is a consultant at Stoke Bishop Associates

Recommended

Steve-Webb-thoughtful-response-in-2014-700.png

Pension freedoms legislation handed Royal Assent

Government legislation which enables the introduction of radical new pension freedoms has been handed Royal Assent. The Pensions Scheme Act, which also enables the creation of so-called ‘Defined Ambition’ risk-sharing schemes, received approval from Queen Elizabeth II today. Pensions minister Steve Webb says the passing of the Act “marks the culmination of a five-year pensions […]

George-Osborne-with-head-down-walking-700.jpg

Osborne admits RBS regrets and seeks quick sale

Chancellor George Osborne says he regrets not restructuring Royal Bank of Scotland in 2010, and wants to sell the Government’s stake in the bank as quickly as possible. In an interview with the FT, Osborne says he went along with RBS’s insistence that its investment bank would be a viable, global business. He says: “I […]

Alan-Lakey-MM-Peach-Byline.jpg
1

Alan Lakey: Is the ABI hindering plan design?

Back in 1999 the Association of British Insurers instigated a critical illness working party charged with the task of applying standard generic terms and injecting greater clarity into plans. Model wordings were applied to 19 conditions in total – seven core conditions (the main conditions covered by at least 95 per cent of all plans) […]

Tax year-end planning with the family

From the Technical team at Prudential Let’s face it, many aspects of financial planning involve a lot of technical detail. At our face-to-face events, we’ve had great success bringing these technical topics to life through the use of practical case studies. Meet the family Prudential’s Planning Matters hub brings together a fictional family and explores […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com