SELF IMPROVEMENT

zero based budgeting
I have been asked this question numerous times by small business owners "How do I make my business more profitable?" Lets look at the Real Estate agent (my client) whose business turned sour at the end of 2008, the time of major stock market crash, who discovered himself in the position when his expenses suddenly could not be covered by the income generated from business. Just cutting expenses was not an option, because in his case most of the expenses were geared towards marketing activities and were supposed to generate new business. Flexibility in small business means an ability to make quick decisions and rapidly implement them. We have reviewed agent's expenses and analysed them. For budgeting we took an approach which is called zero based budgeting
A method of budgeting in which all expenses must be justified for each new period. Zero-based budgeting starts from a "zero base" approach and every function within an organization is analyzed for its needs and costs. Budgets are then built around what is needed for the upcoming period, regardless of whether the budget is higher or lower than the previous one.
However we have decided to redeploy freed up funds into new technologies which would allow the agent to reduce some expenses but at the same time increase marketing exposure to new areas.