How do I write a blog about budgeting, or to be fair, anything finance-related, and make it interesting? Keep it as short and simple as possible.
This rule goes for an effective budget process itself – short and simple, especially if you are an association that is run operationally by your board or by volunteers. Reason being: to come up with a budget you need to know pretty much EVERYTHING that is going to happen in your association in the next year, and this takes time.
If outside of basketball you have a full-time job, you are probably already time poor in what you have available to give the sport that you love – and let’s face it, you want to be able to focus that limited spare time on the kids and the game.
To give you an idea of the basics that will get you going in setting your association budget, consider the following 5 key areas:
Know EVERYTHING that your association wants to do in the next year
At board/committee meetings, discuss with the plans for the year. Using your calendar of events is usually a great help here. For example, how many weeks and days of the week are you running rep training? When will you run Aussie Hoops? Are you having an association end of season party? Write all of these down on a bullet point list, along with the dates they will run and what “stuff” you need to run it. Not only does this help set the foundations of your budget but it also helps the board get on the same page.
Set SMALLER budgets event by event
Rather than being overwhelmed with doing the complete budget, do smaller budgets for each bullet point on your list one-by-one. This will allow you to focus more clearly on each and if you are time poor, get one completed quickly without losing where you are. You can then build up the overall budget over a few days or weeks. You will be also able to see what fee you need to charge for each program individually, ensuring you make a surplus on each. If you tend to have programs that money wise support the others i.e. your surplus from domestic competition may reduce the fee paid by players in your rep teams, then this can be a little bit more complicated but rather than being concerned about this, still do the smaller budgets and when you summarise (excel linking is usually good for this) then you can play about with the figures to get the right balance.
Remember your OVERHEADS
Its very easy to get caught up on what it costs to run the basketball, that we forget about overheads. For example, how are you going to get new kids signing up? Sending fliers, running come and try events? Do you have to pay book-keeping fees or memberships? What about electricity, gas, internet? These cost money and may not be directly attributable to your bullet point lists above, so easy to forget. In your head, imagine walking around stadium or courts and make a note of everything you see that helps your games, clubs, association happen – this will help you come up with a list of overheads.
Build in CONTINGENCY
Once you have summarised your budget (added together all the individual programs, events, overheads etc), if you have a surplus that looks good, build in a contingency line in your overheads with a buffer of $$ that you would be comfortable spending if something came up you were not expecting – your rainy day fund. If its not spent then at the end of the year when you compare actual to budget, you as a treasurer will look great. If something does happen that you weren’t expecting then you are prepared for it better. Another way of doing this is when setting your individual costs, make them the worst they could be, or set your revenue lower i.e. no growth, no increase in membership fees. This way each line has the opportunity to be better than budget. Better to be pessimistic now to give actual positive results later, than give bad news to your board, committee and members later on.
Budgets are NEVER RIGHT
A budget is only an estimation, and you need to remember that. If you are a perfectionist, this may be hard to take on board. As a volunteer or board member, your time is too valuable to be spending searching for a missing $5 at the end of the year. If its $500 then that’s a different story, but for $5, don’t waste your time. Budgets are a learning tool, what you don’t estimate quite right this year, you will be better prepared for next year and so on. If you are going way off budget, be open and transparent with the rest of your board and committee on a regular basis at your monthly board meetings. They might be able to help you get back on track by looking at what you have all planned for the year and see where adjustments can be made. You are a team after all!
While it takes time to write up a budget, they are so crucial to the success of your association. It’s a means of planning, communication and a way to determine a basis for your membership fees (it also helps you justify them too). Once you have one year done, you will find the process easier in the future. Still a bit daunted by all of this? Click on the link below to download a simple excel spreadsheet that will help you start thinking about the bullet points you need, and remember budgets are never 100% right!