IB Business Management Topic 3.9.2 Constructing a Budget Revision Notes (HL)

IB Business Management Topic 3.9.2 Constructing a Budget Revision Notes (HL) | RevisionDojo

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Budget Construction: A Step-by-Step Guide

Definition

Budget

A financial plan that estimates income and expenses over a specific period, guiding decision-making and resource allocation.

Just like any plan, budgets are essential for forecasting, controlling, and allocating resources effectively.
Think of it as a roadmap for financial success.

The Budget Construction Process

1. Setting Objectives

Before diving into numbers, a business must define its financial goals.
These could include:
1. Increasing revenue by 10%.
2. Reducing costs by 5%.
3. Allocating funds for a new project.

Tip

Clear objectives provide direction and ensure that the budget aligns with the business's strategic priorities.

2. Estimating Revenues

Revenue estimation involves forecasting the income a business expects to earn.
This requires:
1. Market Analysis: Understanding trends, customer demand, and competitor actions.

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Definition

Paywall

(on a website) an arrangement whereby access is restricted to users who have paid to subscribe to the site.

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Lorem ipsum dolor sit amet, consectetur adipiscing elit. Sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat.

Duis aute irure dolor in reprehenderit

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Note

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Excepteur sint occaecat cupidatat non proident

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Tip

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat.

Lorem ipsum dolor sit amet, consectetur adipiscing elit.
Sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris.
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum.

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Budget Construction: A Step-by-Step Guide

Definition

Budget

A financial plan that estimates income and expenses over a specific period, guiding decision-making and resource allocation.

Just like any plan, budgets are essential for forecasting, controlling, and allocating resources effectively.
Think of it as a roadmap for financial success.

The Budget Construction Process

1. Setting Objectives

Before diving into numbers, a business must define its financial goals.
These could include:
1. Increasing revenue by 10%.
2. Reducing costs by 5%.
3. Allocating funds for a new project.

Tip

Clear objectives provide direction and ensure that the budget aligns with the business's strategic priorities.

2. Estimating Revenues

Revenue estimation involves forecasting the income a business expects to earn.
This requires:
1. Market Analysis: Understanding trends, customer demand, and competitor actions.

Definition

Paywall

(on a website) an arrangement whereby access is restricted to users who have paid to subscribe to the site.

anim nostrud sit dolore minim proident quis fugiat velit et eiusmod nulla quis nulla mollit dolor sunt culpa aliqua

Duis aute irure dolor in reprehenderit

Note

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam quis nostrud exercitation.

Excepteur sint occaecat cupidatat non proident

Tip

Lorem ipsum dolor sit amet, consectetur adipiscing elit.
Sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris.
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum.

Unit 1: Introduction to Business Management - Core operational components and business functions6 subtopics

Unit 2: HR Management - Motivation, Structure, Hierarchy7 subtopics

Unit 3: Financial Management - Accounting, Ratio evaluation, Core Financial Documents9 subtopics

Unit 4: Marketing Management - The 7 P's, strategies and forecasting6 subtopics

Unit 5: Operations Management - Production Methods, Production planning and management9 subtopics

BM Toolkit - Core business frameworks and tools15 subtopics

IB Business Management 3.9.2 Constructing a Budget Notes

Unit 1: Introduction to Business Management - Core operational components and business functions6 subtopics

Unit 2: HR Management - Motivation, Structure, Hierarchy7 subtopics

Unit 3: Financial Management - Accounting, Ratio evaluation, Core Financial Documents9 subtopics

Unit 4: Marketing Management - The 7 P's, strategies and forecasting6 subtopics

Unit 5: Operations Management - Production Methods, Production planning and management9 subtopics

BM Toolkit - Core business frameworks and tools15 subtopics

Budget Construction: A Step-by-Step Guide

The Budget Construction Process

1. Setting Objectives

2. Estimating Revenues

anim nostrud sit dolore minim proident quis fugiat velit et eiusmod nulla quis nulla mollit dolor sunt culpa aliqua

Duis aute irure dolor in reprehenderit

Excepteur sint occaecat cupidatat non proident

Unlock the rest of this chapter with a free account

Budget Construction: A Step-by-Step Guide

The Budget Construction Process

1. Setting Objectives

2. Estimating Revenues

anim nostrud sit dolore minim proident quis fugiat velit et eiusmod nulla quis nulla mollit dolor sunt culpa aliqua

Duis aute irure dolor in reprehenderit

Excepteur sint occaecat cupidatat non proident

Unlock the rest of this chapter with a free account