2005 Budget
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The development process
- Develop Profit and Loss report for 2005
- Gather numbers on income and expenses for 2005. This will be the basis for what will happen in 2006.
- Status: DONE (May be a few minor changes coming.)
- Develop a "Status Quo" budget
- Research trends that are likely to change those numbers and apply. (Lease determines rent, for example. This is a known. Database shows how fast we're growing. This is an estimate.) This version of the budget says if we change nothing at all about how we do things, what is likely to happen? This is where we currently are in the process.
- Status: DONE (This is the budget you see listed below.)
- Address the weak spots
- Take action necessary to address any problems identified in the "Status Quo" budget and incorporate them into the budget. This version is supposed to fixes any leaks with minimal changes in how we do things.
- Status: DONE (The first half of the year looks weak, but is addressed in the second half and the operational reserve helps cushion the problem.)
- Add planned changes
- When do we want to hire more people? Increase wages? Rent more space? Start up a new program? How will these generate money? How much will they cost? This requires the organization to decide on its plans as we research and incorporate.
- Status: NEED TO DO (This requires prioritization and plans for implementation.)
- Change the quarterly budget into a monthly budget
- Some categories will just get divided by 3 to produce this. In other cases we'll make assumptions about when costs and income will happen.
- Status: NEED TO DO (The last step, waiting for the above to finish.)
All throughout the process get as much feedback as possible from as many people as possible to catch as many oversights as we can. This is a process.
Income and Expenses for 2005
To start with, here's a profit and loss statement by quarter for 2005.There may be a few transactions for the month of December that will need to be adjusted, but this should be very close.
| . | Q1 | . | Q2 | . | Q3 | . | Q4 | . | YEAR | |
| Consulting | $- | $- | $- | $7,135.00 | $7,135.00 | |||||
| Donations, C4K | $25.00 | $25.00 | ||||||||
| Donations, Online | $370.00 | $1,551.91 | $10.00 | $125.00 | $2,056.91 | |||||
| Donations, Regular | $20,044.91 | $34,929.12 | $24,406.04 | $19,113.18 | $98,493.25 | |||||
| Education | $1,040.00 | $380.00 | $120.00 | $- | $1,540.00 | |||||
| Fundraisers | $1,325.79 | $- | $1,325.79 | |||||||
| Grants | $1,708.25 | $1,000.00 | $11,300.00 | $16,200.00 | $30,208.25 | |||||
| Interest | $30.52 | $18.64 | $12.16 | $51.52 | $112.84 | |||||
| Miscellaneous Income | $- | $- | $0.97 | $120.00 | $120.97 | |||||
| Monitor Fees | $27,600.50 | $25,953.10 | $34,795.94 | $26,806.00 | $115,155.54 | |||||
| Outreach Events | $193.75 | $1,379.00 | $1,902.00 | $- | $3,474.75 | |||||
| Overages | $- | $- | $476.41 | $751.95 | $1,228.36 | |||||
| Pickups | $- | $- | $175.00 | $- | $175.00 | |||||
| Recycling Income | $8,944.32 | $16,259.75 | $8,564.52 | $11,686.51 | $45,455.10 | |||||
| Sales, External | $- | $- | $414.05 | $1,036.10 | $1,450.15 | |||||
| Sales, Online | $908.14 | $1,005.23 | $- | $- | $1,913.37 | |||||
| Sales, Retail | $36,330.36 | $35,450.98 | $40,388.15 | $44,531.89 | $156,701.38 | |||||
| Sales, Wholesale | $609.42 | $40.00 | $398.25 | $977.90 | $2,025.57 | |||||
| Space Rental | $- | $- | $- | $40.00 | $40.00 | |||||
| Sponsorship | $- | $167.70 | $3.80 | $- | $171.50 | |||||
| Tenant Sublets | $2,392.00 | $1,072.00 | $1,037.00 | $2,070.00 | $6,571.00 | |||||
| Untracked Adjustments | $- | $- | $950.75 | $- | $950.75 | |||||
| TOTAL INCOME | $101,497.96 | $119,207.43 | $124,955.04 | $130,670.05 | $476,330.48 | |||||
| Adminstration | $1,978.12 | $1,678.80 | $1,412.50 | $949.13 | $6,018.55 | |||||
| Advertising | $- | $- | $- | $535.00 | $535.00 | |||||
| Auction fees | $74.11 | $47.64 | $11.24 | $- | $132.99 | |||||
| Consulting Expenses | $- | $- | $1,160.00 | $7,135.00 | $8,295.00 | |||||
| Fundraisers | $12.98 | $- | $- | $- | $12.98 | |||||
| Health Care | $9,891.99 | $7,438.19 | $7,941.10 | $7,504.56 | $32,775.84 | |||||
| Merchandise Purchases | $109.78 | $264.96 | $- | $- | $374.74 | |||||
| Miscellaneous Expenses | $- | $- | $- | $- | $- | |||||
| Monitor Recycling | $10,832.00 | $9,551.50 | $15,558.08 | $14,776.00 | $50,717.58 | |||||
| Other Facility | $3,144.74 | $1,423.29 | $793.02 | $1,528.68 | $6,889.73 | |||||
| Outreach Events | $216.51 | $544.62 | $1,919.36 | $- | $2,680.49 | |||||
| Parts for online sales | $79.64 | $- | $- | $- | $79.64 | |||||
| Payroll | $49,621.20 | $44,551.80 | $43,539.67 | $46,193.85 | $183,906.52 | |||||
| Payroll Accounting | $775.54 | $532.99 | $792.46 | $769.17 | $2,870.16 | |||||
| Program Supplies | $309.75 | $2.99 | $788.41 | $138.98 | $1,240.13 | |||||
| Recycling Disposal | $- | $78.12 | $103.57 | $46.48 | $228.17 | |||||
| Rent | $19,900.00 | $20,100.00 | $20,100.00 | $20,100.00 | $80,200.00 | |||||
| Shipping | $68.13 | $460.74 | $86.69 | $- | $615.56 | |||||
| Short Tills | $- | $- | $255.48 | $236.87 | $492.35 | |||||
| Staff Training and Education | $- | $- | $300.00 | $- | $300.00 | |||||
| Taxes and Withholding | $17,265.65 | $14,259.59 | $14,482.23 | $14,741.51 | $60,748.98 | |||||
| Telecom | $792.84 | $744.37 | $749.46 | $742.39 | $3,029.06 | |||||
| Theft and Fraud | $299.00 | $- | $376.50 | $97.00 | $772.50 | |||||
| Utilities | $4,926.06 | $3,682.00 | $4,292.21 | $4,739.00 | $17,639.27 | |||||
| Volunteer rewards | $- | $42.00 | $- | $138.95 | $180.95 | |||||
| Workers Compensation | $304.50 | $304.50 | $304.50 | $304.50 | $1,218.00 | |||||
| TOTAL EXPENSES | $120,602.54 | $105,708.10 | $114,966.48 | $120,677.07 | $461,954.19 | |||||
| PROFIT (LOSS) | $(19,104.58) | $13,499.33 | $9,988.56 | $9,992.98 | $14,376.29 | |||||
Current Budget (for 2006)
| . | Q1 | . | Q2 | . | Q3 | . | Q4 | . | YEAR | |||
| Growth | Assumps | |||||||||||
| Consulting | $- | $- | $- | $- | $- | Z | ||||||
| Donations, C4K | $6.56 | $6.56 | $6.56 | $6.56 | $26.25 | 105% | ||||||
| Donations, Online | $539.94 | $539.94 | $539.94 | $539.94 | $2,159.76 | 105% | ||||||
| Donations, Regular | $25,854.48 | $25,854.48 | $25,854.48 | $25,854.48 | $103,417.91 | 105% | ||||||
| Education | $404.25 | $404.25 | $404.25 | $404.25 | $1,617.00 | 105% | ||||||
| Fundraisers | $348.02 | $348.02 | $348.02 | $348.02 | $1,392.08 | 105% | ||||||
| Grants | $- | $- | $- | $- | $- | Z | ||||||
| Interest | $29.62 | $29.62 | $29.62 | $29.62 | $118.48 | 105% | ||||||
| Miscellaneous Income | $31.75 | $31.75 | $31.75 | $31.75 | $127.02 | 105% | ||||||
| Monitor Fees | $32,934.48 | $30,401.06 | $30,401.06 | $32,934.48 | $126,671.09 | 110% | U | |||||
| Outreach Events | $912.12 | $912.12 | $912.12 | $912.12 | $3,648.49 | 105% | ||||||
| Overages | $322.44 | $322.44 | $322.44 | $322.44 | $1,289.78 | 105% | ||||||
| Pickups | $- | $- | $- | $- | $- | Z | ||||||
| Recycling Income | $11,931.96 | $11,931.96 | $11,931.96 | $11,931.96 | $47,727.86 | 105% | ||||||
| Sales, External | $1,048.53 | $1,116.92 | $1,162.50 | $1,230.89 | $4,558.84 | 110% | G, YEC | |||||
| Sales, Online | $- | $929.03 | $988.96 | $1,078.87 | $2,996.86 | 110% | G, Q2 | |||||
| Sales, Retail | $38,150.02 | $40,638.07 | $42,296.76 | $44,784.81 | $165,869.66 | 110% | G | |||||
| Sales, Wholesale | $2,007.90 | $2,138.85 | $2,226.15 | $2,357.10 | $8,729.98 | 110% | G | |||||
| Space Rental | $- | $- | $- | $- | $- | Z | ||||||
| Sponsorship | $- | $- | $- | $- | $- | Z | ||||||
| Tenant Sublets | $3,000.00 | $3,000.00 | $3,000.00 | $3,000.00 | $12,000.00 | F $1,000 | ||||||
| Untracked Adjustments | $- | $- | $- | $- | $- | Z | ||||||
| TOTAL INCOME | $117,522.09 | $118,605.07 | $120,456.60 | $125,767.30 | $482,351.06 | |||||||
| Adminstration | $1,579.87 | $1,579.87 | $1,579.87 | $1,579.87 | $6,319.48 | 105% | ||||||
| Advertising | $140.44 | $140.44 | $140.44 | $140.44 | $561.75 | 105% | ||||||
| Auction fees | $50.02 | $50.02 | $50.02 | $50.02 | $200.09 | 105% | Q2 | |||||
| Consulting Expenses | $- | $- | $- | $- | $- | Z | ||||||
| Fundraisers | $3.41 | $3.41 | $3.41 | $3.41 | $13.63 | 105% | ||||||
| Health Care | $11,448.00 | $11,448.00 | $11,448.00 | $12,592.80 | $43,936.80 | 105% | HC | |||||
| Merchandise Purchases | $98.37 | $98.37 | $98.37 | $98.37 | $393.48 | 105% | ||||||
| Miscellaneous Expenses | $75.00 | $75.00 | $75.00 | $75.00 | $300.00 | F $25 | ||||||
| Monitor Recycling | $14,505.23 | $13,389.44 | $13,389.44 | $14,505.23 | $55,789.34 | 110% | U | |||||
| Other Facility | $2,727.30 | $2,727.30 | $2,727.30 | $2,727.30 | $10,909.22 | 105% | ||||||
| Outreach Events | $703.63 | $703.63 | $703.63 | $703.63 | $2,814.51 | 105% | ||||||
| Parts for online sales | $- | $77.77 | $82.79 | $90.31 | $250.87 | 105% | Q2 | |||||
| Payroll | $46,193.85 | $46,193.85 | $46,193.85 | $46,193.85 | $184,775.40 | 100% | YEC | |||||
| Payroll Accounting | $753.42 | $753.42 | $753.42 | $753.42 | $3,013.67 | 105% | YEC | |||||
| Program Supplies | $325.53 | $325.53 | $325.53 | $325.53 | $1,302.14 | 105% | ||||||
| Recycling Disposal | $59.89 | $59.89 | $59.89 | $59.89 | $239.58 | 105% | ||||||
| Rent | $20,100.00 | $20,100.00 | $20,100.00 | $20,100.00 | $80,400.00 | 100% | ||||||
| Shipping | $- | $66.53 | $70.82 | $77.26 | $214.61 | 105% | Q2 | |||||
| Short Tills | $129.24 | $129.24 | $129.24 | $129.24 | $516.97 | 105% | ||||||
| Staff Training and Education | $78.75 | $78.75 | $78.75 | $78.75 | $315.00 | 105% | ||||||
| Taxes and Withholding | $15,478.59 | $15,478.59 | $15,478.59 | $15,478.59 | $61,914.34 | 105% | ||||||
| Telecom | $870.00 | $870.00 | $870.00 | $870.00 | $3,480.00 | F $290.00 | ||||||
| Theft and Fraud | $202.78 | $202.78 | $202.78 | $202.78 | $811.13 | 105% | ||||||
| Utilities | $4,850.80 | $4,850.80 | $4,850.80 | $4,850.80 | $19,403.20 | 110% | ||||||
| Volunteer rewards | $47.50 | $47.50 | $47.50 | $47.50 | $190.00 | 105% | YEC | |||||
| Workers Compensation | $319.73 | $319.73 | $319.73 | $319.73 | $1,278.90 | 105% | ||||||
| TOTAL EXPENSES | $120,741.34 | $119,769.85 | $119,779.16 | $122,053.72 | $482,344.08 | |||||||
| PROFIT (LOSS) | $(3,219.25) | $(1,164.78) | $677.43 | $3,713.59 | $6.98 | |||||||
| -2.67% | -0.97% | 0.57% | 3.04% | 0.00% | ||||||||
| Assumption Key | ||||||||||||
| F -- flat monthly amount | ||||||||||||
| HC -- F $318*12 with 15% rise in Nov, Dec | ||||||||||||
| Q2 -- begin in 2nd quarter | ||||||||||||
| G -- growth (rising curve) | 23% | 25% | 26% | 27% | ||||||||
| U -- U shaped curve | 26% | 24% | 24% | 26% | ||||||||
| YEC -- year end constant | ||||||||||||
| Z -- zero money in 2006 | ||||||||||||
| 5% payroll = | $3,125.23 | $3,125.23 | $3,125.23 | $3,125.23 | $12,500.92 | |||||||
| 10% payroll = | $6,250.46 | $6,250.46 | $6,250.46 | $6,250.46 | $25,001.84 | |||||||
| 15% payroll = | $9,375.69 | $9,375.69 | $9,375.69 | $9,375.69 | $37,502.76 | |||||||
- See how we're doing at Actual Expenses Compared to Budget
Proposed Budget Changes (increases)
DRAFT - brainstorm list at the moment, add your line items, numbers and projects. These are not listed in any order of priority (yet).
Increase cash reserve amount to one months operating expenses
- Approx. $30,000 ($10,000 existing and $40,000 current monthly expenses).
- The cost of this item goes up with some of the budget increases proposed below.
Increase wages
- Cost: unknown
Increase Staff
- Cost: at current wages/hours approx. $2,200/month per 35 hour per week employee.
Increase Staff Hours
- Adding hours for those who want more.
- Increasing the maximum hours per week (up to 40)
- Cost: unknown
Increase Wages
- Cost: unknown
Open an additional day
- Cost: unknown
Upgrade floor in mezzanine
- $1,600 (materials only)
Upgrade lighting/acoustics in offices/classrooms
- $20,000 (WAG)
- Repairs to existing drywall ceiling to be paid for by landlord (approx. $2,500).
Upgrade lighting and lighting controls in warehouse
- $1,200 (WAG)
Steel/cardboard bailer
- $4,000 for equipment
- $10,000 for electrical upgrades, concrete pad and fenced/roofed enclosure installation.
Notes and Assumptions
I started with the above Profit and Loss report for 2005, and then I started plugging in assumptions for each income and expense stream.
- The last three rows show how much across the board staff raises would cost. They are not part of this conservative budget. Rather they are an option that could be added on if profit goes up more than anticipated by this budget.
- This budget should be a conservative one that mostly assumes the status quo. We can use it to see what is likely to happen in 2006 without adding any "extras".
- This budget shows a loss for the first two quarters of 2006, but those losses are recovered in the last two quarters. There is an operational reserve of around $10,000 that would get dipped into at the beginning of the year and replenished later on, if reality plays out like this budget predicts.
- The "Growth" column should show how much growth in the budget exists over the previous year.
- We're assuming a 5% growth rate in most small categories by default. This is represented by 105% in the "Factor" column.
- Sales numbers were not tracked separately very well in 2005. That is, while we had separate categories for Retail and Wholesale sales, many wholesale sales were actually recorded in the Retail Sales expense account. Therefore, we've lumped all the sales numbers together to start with and then broken out the percentages for each type of sales from there (estimating 95% retail and 5% wholesale). Because of this, the growth factor for wholesale sales looks a bit high, but probably isn't.
- Part way through 2005, we stopped selling stuff online and farmed it out to another organization. Therefore, there is activity in the Online Sales in Quarters 1 and 2, followed by activity in External Sales in Quarters 3 and 4. We are assuming that we will start selling items online again sometime in 2006 -- beginning of Quarter 2. This helps account for the larger growth factors reported in those categories.
- Somewhere on the web it said that utilities would go up (PGE up by 5.3%, NW Natural up by 15.2%). We're guessing all utilities up by 10%.
- Based on trends reflected in the database overall donations of major items (Monitors, Systems, and Printers) for 2006 will increase 10% over 2005. Monitors are expected to do significantly better due to low prices for LCD monitors. Monitor related accounts are therefore expected to grow by some measure higher than 10%. Nevertheless, we're using a 10% growth factor.
- Tenant Sublets are supposed to be bringing in around $1,000 per month. We are investigating why this was not the case for 2005.
- Certain categories of expense and income are altogether eliminated in this version. They might be reintroduced as a strategy for addressing weak spots or for other reasons in later versions of this budget. The eliminated categories in this version are marked with a Z in the assumptions column.
Old Notes
From the RT ticket we have a list of random things that should be included. Some of these may overlap with categories we already have in the books. Some may not even be desired -- this is just a brainstorm for now.
- substitute fund
- to pay workers to cover for vacation that staff takes, sick days, etc.
- hiring expenses
- get numbers from this year's hirings, estimate the number of hirings in 2006, and calculate
- vacation payoffs
- how many people will be quitting in 2006 (estimate based on past trends, estimate amount of unused vacation, calculate)
- - (The way to this is to combind the "Substitute fund" above and this into an account for accrued payroll expenses - every pay period an amount equal to vacation time earned that period should be added to the fund and whenever vacation is used it should come out of this fund weather is a payoff or just vacation pay
- nice to have a general fund
- what's this mean?
- a "staff vacation to breitenbush" fund
- ha! sounds fun!
- a physical plant fund for maintenance
- we should anticipate projects that we might want to accomplish, and look at past expenses for maintenance.
- repayment of personal loan
- $1,000 per month to starting (April 2005) and ending at the end of 2005 (this will need to be included for a few months if we slip on our 2005 timeline)
- re-keying the building
- How much? We should do this every year and figure it into budget.
- Board and officers insurance
- Oso's getting a quote
- Credit card processing fees
- How much?
- food for core breakfast and retreats, etc.
- We should estimate how much it would cost to re-establish this practice
- shawn wants a $100/mo ad fund
- Like for outreach in general. $100 is an ideal number. Starting with $50 or even $25/month would be a good start.