by Jeff Hardy
Before putting number projections into a spreadsheet to come up with a proposed community budget, the first place to start is to develop a business plan for the community. What do I mean by a community business plan? It simply means a written plan listing the goals, activities and events for the new budget year. Some of the line items in the plan will affect income and expenses, while others are just activities and events that may not have dollars attached to them—but need to be listed on the business plan as reminders or To Do’s.
Think about it. How can you accurately project the income and expenses for a community budget unless you know what the community and their officers want to achieve during the next year? A business plan is the qualitative part of the budget where the dollar income and expense projections are the quantitative part of the budget.
Normally, a community business plan is laid out on a monthly timeline. This helps not only as a guideline and reminder for what needs to be accomplished, but also when it should as well. Laying out a business plan on a timeline also helps determine in what budget period the dollar income or expenses needs to be budgeted.
Creating a monthly community business plan also underscores another important point about community budgets—a budget should ALWAYS be developed by projecting income and expense on a monthly basis, which then adds up to the totals for the year. If you do it the other way, which is coming up with total income and totals for each line item of expense—then dividing those totals by 12 it is not going to create a realistic budget that will be of much use to the community officers as a point of comparison when they see it on the Income/Expense Statement compared to the actual income and expense.
Once the community officers have approved the business plan, you are then ready to start putting budget projections into a spreadsheet. If you don’t create a community business plan and review it with the officers, then you’re shooting in the dark when it comes to creating the budget itself. So not only will the budget likely be more accurate by taking this approach, you will appear more professional to the community officers for taking this initial step.
We've prepared a free sample community business plan for you to download. While your business plan may look different depending on the community, this sample will give you an idea of the things that should be on a community business plan.