Advice for CEOs

One of the first management processes that many emerging growth companies try to institutionalize is budgeting. Budgeting is an essential building block of good management. It serves to control spending in line with a company’s operating and capital plans. It provides a framework to compare actual revenue, expense, and profit with the plan. Budgeting forces accommodation and agreement between top-down management goals and bottom-up feedback from managers and staff about what is actually feasible for the company to achieve. And lastly, it imparts a sense of discipline and order to the company’s operations.