It was a great experience to budget for the firm, even though it was something nobody in our team had done. It was quite clear considering we were all wondering what the different prices would be (e.g. operational costs, costs for hardware/software). For some things such as printer costs, it was more manageable and easier to decide on due to previous experience. Eg for Alazar and Fotis it was easier to predict Web Server costs, while for Aleks it was easier think about what would be the cost for a warehouse, VAT related calculations. Winnie on other hand bought some things which we did not consider, leading to changes in numbers.
Yet by doing first the Marketing Part and then the Whole firm, some problems arose. For example we included Labour costs in the Marketing budget, leading us to wonder what we should put to the overall budget. If we did it again, it may be a good idea to know what’s included in each budget, so that we would not consider wages for the same worker 2 times.
The experience showed why so much money is given for budgeting firms, and the complexity that comes with budgeting. Yet such division as the exercise would be used by large companies. In Busy Corporation (my parents’), it’s me and my mom who do this work, as the company is small and on top by having the managers do the work, it’s possible to learn more about the business and see how things are going.
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great comment! I am glad you guys considered the complexity of budgeting. When we also talk about introducing IT, the complexity increases, as there are technological and non technological components. There is something called the productivity paradox: the more we spend in IT, the busier we are and the more things we need to manage. But at the same time, the capacity of an organisation to grow increases...So this is where good IT management (like a good parent managing a firm) makes the difference.
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