2020 Vision – our 5 tips for successful budgeting
We know that this is such a busy time of year – Christmas is just around the corner, and many of you are facing key decisions in planning and budgeting for the next financial year. But you’re not alone – the Charity Retail Consultancy is your budgeting friend and we’ve developed 5 top tips to help with this crucial task.
Tip 1: Understand what a budget really is
It’s not about managing all costs to the last penny; a budget is a thoughtful plan that helps you stick to your strategy and spot and deal with areas for improvement by making better spending decisions.
Go into budgeting with a positive mindset; it never works well if you see it as a hurdle, so start the process with knowledge, hope, confidence and see your budget plans for what they are – a helpful business tool.
Tip 2: Be realistic
If you set budgets which others in your team and the wider charity see as unattainable, then that’s the likely outcome. So unless there are any major changes planned, develop your budget based on past results and future projections.
Start by recognising which costs are fixed and inevitable. Then look at lines that have fluctuated over the years (we suggest looking back over 5 years) and identify what caused this fluctuation. Was it one-offs, could costs have been better controlled or can high income lines be repeated?
Use your charity’s past information to develop a more concrete basis for establishing budget numbers. This doesn’t mean you shouldn’t be ambitious – the unrestricted income from a charity retail operation is vital to every charity, so aspire to be the best you can be, but ensure those predictions are based on strong foundations.
Tip 3: Be thorough
The more detailed your planning is, the more effective your budget will be. So plan when you will do your budgeting, give yourself plenty of time and ideally, lock yourself away and tell people not to disturb you apart from emergencies.
And remember you’re not alone – talk to colleagues in your team and in the wider charity. The Finance and IT teams for example might have knowledge and tips to help you, and your own team have more detailed knowledge than you in some areas – for example, you might not know that a shop manager is planning on retiring, but with that knowledge you can plan its impact on costs (such as recruitment and training) and income.
Tip 4: Share it
The retail budget shouldn’t be a secret. At The Charity Retail Consultancy we are big advocates of transparency and accountability, and we know there is a real difference in the success of those charities that share budgets and other important information with their teams and those that don’t. It’s not always easy or comfortable but a shared budget ultimately leads to greater trust, engagement, increased feedback and beneficial communication. The more you can empower and engage your employees, the better off your retail operation will be.
Tip 5: Talk to us!
The Charity Retail Consultancy helps charities deliver better budgets that are ambitious and achievable. We start with a conversation about where you want to go and what you want to achieve with the resources you have available, and then we offer guidance on the best ways forward. For example, your strategy might include having 3 volunteers per shift in every shop, so we can work with you to look at what that means in terms of numbers, develop a series of recruitment events, and run a bespoke training course for all staff. Many charities spend less than £20 per year on training each of their retail staff, leading to a loss of motivation and of skills to get the most from their shop and local team.
At The Charity Retail Consultancy we are an award winning, hugely experienced and passionate team who take pride in delivering bespoke and highly rated retail training, development and mentoring to charities across the UK.