Financial Management: Organizations Need Two Kinds Of Budgets.

Organizations actually need two different budgets and two kinds of budgets: business budgets and innovative budgets.

We often find that organizations actually need two different budgets.

They serve different goals, and accordingly, their difficulty levels are quite different.

(1) the first budget is the standard budget, that is, the business budget.

This budget is aimed at the existing business, which are all familiar and familiar business.

In such a budget, although we can not only deduce the past based on the past, the past and present data are useful, or at least some reliable reference data.

The key question involved in this budget is: what is the minimum amount of resources needed to successfully maintain the business operation? In this budget, the traditional enterprise management thinking method is applicable and correct.

(2) the second budget is

。

Unfortunately, only a very small number of enterprising enterprises will formulate it. The object of this budget is new things, namely innovation.

Such a budget will not focus on empirical data, because there is no experience for new things.

Since this budget contains many important uncertainties, it can not be integrated into other conventional budgets.

First of all, this will weaken the effect of the business budget; secondly, the opportunity in the business budget.

It will also become ambiguous.

In the opportunity budget, we must pay attention to two questions: first, are the resources we are using in suitable opportunities and innovations? Second, if so, what is the maximum amount of resources needed to really seize opportunities and achieve great successes?

"Too little resources, too late to allocate, and apportionment in too many departments" is the main reason for the failure of many good and very important public projects, and it is also true for business projects.

In the sense of metaphor, the motto of Guderian, general of German tank forces in the Second World War, "do not disperse resources", gave the key to the success of new projects.

That is to say, we should concentrate all our efforts on a few things and fully ensure their implementation.