Finance for Non-Financial Managers and Small Business Owners

By Lawrence W. Tuller | Go to book overview
Save to active project

Chapter 9
Operating Budgets

STRATEGIC PLANS, business plans, financing plans, forecasts, and budgets all purport to do the same thing: assist you in planning and controlling your business. It’s enough to make a person’s head spin. Why so many terms for essentially the same thing?

Well, to begin with, the business community, the financial community, the academic community, and the U.S. government all tend to misuse these planning terms. More often than not, people choose a term they are familiar with and then apply it indiscriminately to all plans. Unfortunately, this doesn’t help the non-financial manager who is trying to make sense out of an apparent hodgepodge of financial terminology. Let me try to put this whole planning mess into perspective with some basic definitions that I use in this book (and, I might add, that are used by knowledgeable business planners and analysts), beginning with long-term plans and working down to short-term plans.


STRATEGIC PLAN

A strategic plan is a long-term plan. Typically, it looks five years into the future—at times even longer, depending on a company’s business cycle. If the cycle is seven or ten years, then the strategic plan should be seven or ten years. Strategic plans lay out a company’s long-term objectives in narrative fashion, covering all major activities—markets, products, finances, human resources, and R&D. This narrative is supported by detailed financial forecasts of balance sheets, income statements, and cash flow schedules for each year of the plan. A strategic plan is primarily a working tool for top management and the board of

-149-

Notes for this page

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this page

Cited page

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited page

Bookmark this page
Finance for Non-Financial Managers and Small Business Owners
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this book

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen
/ 306

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?