chapter 10 summary

Budget Planning:

"budgeting entails using the best judgment, based partly on past experience, combined with an investigation of current cost factors"

Any business needs a budget to keep track of the funds they have now, and to plan the use of the funds that will be coming in. An institution must know how much each department will need. There also needs to be a variable account that can be used in case a department uses more than budgeted, or if not enough funds come in.

there are three important "don'ts" when it comes to budgeting:
1. Don't Spend Income Before It's Earned.
a very logical idea - a business doesn't want to have a bill that they can't foot - it could influence the upcoming season, or the status of the building.
2. Don't Spend or Budget the Same Dollar Twice
this is very hazardous - if doubled up, the institution won't have enough money.
3. Don't Get Into the Boat Unless You Can Afford to Sink
a general rule of thumb, don't risk it if you can't afford to lose it.

estimations need to be made of the income, and of the expenses. getting a general idea of what is coming in will help the theatre decide how much to generally budget for the expenses. budget planning is one of the most important issues of the theatre. "variances between estimated and actual figures will directly affect the tenure of employees, which productions will be produced, and ultimately whether or not the organization will succeed or fail. hence, it is important to think long and hard when making budgets and financial plans."