Budgeting

---
name: Budgeting
description: Plan resource allocation across the org.
---
# Budgeting

A budget converts strategy into resource allocation. Done well it focuses spend on priorities; done badly it becomes political theater where every department inflates its ask.

## Approaches
- **Incremental** — last year + X%. Fast, but entrenches yesterday's priorities and bloat.
- **Zero-based** — justify every line from scratch. Rigorous but exhausting; reserve for periodic resets.
- **Driver-based** — model spend as a function of business drivers (revenue, headcount, customers). Adapts as drivers change.

## Principles
- **Tie to plan.** Every budget line maps to a strategic initiative or a "keep the lights on" necessity. Orphan lines get cut.
- **Build in flex.** Specify what scales up if revenue beats, and what gets cut if it misses. Rigid budgets break on the first surprise.
- **Variance review monthly.** A budget unreviewed is fiction. Catch drift early.