Is creating a Hotel Budget the most important thing a Hotel does?
Budgeting is simply the process of creating a plan of how to spend your money (carry on reading or watch the video).
Creating this spending plan – this Budget – allows the Hotel Managers to understand whether they will have enough money to do the things they need to do or would like to do?
Every business, apart from the very smallest, certainly every Hotel, should operate with a spending plan – a Budget.
In a Hotel this Budget – this spending plan – might be created by your Senior Managers, an Accountant, or an Office outside of the Hotel, but where-ever it is written and who-ever its creator is – its purpose will be the same….
…. Budgeting simply allows you to balance your expenses with your income; as if they don’t balance and you spend more than you make, you will have a problem.
You will make a loss. And the Hotel would have to shut.
Whether you work in a small or a large Hotel, a Hotel which is expensive or less so, an Independent Hotel or you are part of an International Brand – you need to plan for your spending – you need to Budget.
Budgeting involves Experts Setting Realistic Goals for the Hotel. Experts must Identify the Hotel’s Incomes and Expenses. Separating the Hotel’s Needs and Wants. And Setting clear priorities for the Hotel and each Hotel Department.
Senior Hotel Managers may want to map out your spending plan or budget for 12 months, or significantly longer, into the future.
My advice is to create the physical Budget with an Accountant with expert knowledge of Financial Management and the rules of accounting for your country. And they must know how to use a Spreadsheet. And understand the Hotel Industry.
Once you create your first Budget, this financial plan must be used.
A Budget has to be achievable.
If significant alterations happen to the Hotel, the environment that it operates in or you simply realise mistakes were made during it’s formulation. You are occasionally allowed to make changes to Budgets as time progresses.
I will leave you with a famous quote from Muhammad Ali to consider Budgeting with ….
…. “Don’t quit. Suffer now and live the rest of your life as a champion.”