An Analysis of a Budget Proposal
A budget calls for realism that would be based on established facts and not on hunches only, and it is necessary to find out where the figures have been based.To start with, there is a need to view the competition in this kind of magazine and find out if it satisfies the need of the potential customers. The magazine is about interior design, so there is a need to consider the population and the economic growth in the location, and lastly, according to a study, a customer profile must be developed. (“Conduct a ….”)Accuracy of forecast is often influenced by external factors such as the trends in the industry, size, and location of the planned area. A planned area, according to “Conduct a sales forecast” is “how far your customer will travel to shop, as well as how far you are prepared to distribute your product”. My suggestion in this area is for the company to establish familiarity with the trading area, which could be done by talking to neighborhood business owners, contracting the Chamber of Commerce, and use of other media.As this is a new venture, the accuracy of forecasts of sales will be an influence of competition, which is done by getting an estimate of the average of the monthly sales of similar-sized competitors. I would further suggest the need to study the quality of the competitors’ publication, prices, promotional techniques, and other similar techniquesOther influences are: “Seasonality of the business, relative state of the economy, direct and indirect competition, political events, styles or fashions, consumer earnings, population changes, weather and productivity changes” “(“Conduct a…” 2009)a. Monitor the budget – Budget planning is a step that allows management to think creatively about the future of the business. The budget, once approved and implemented, becomes the benchmark by which management can measure actual results, thus it becomes the standard.