Budgeting Basics and Beyond

24.1. Planning

A long-term plan should be formulated based on short-term objectives. Evaluate programs to ascertain whether they should be continued, and formulate new programs that are needed. Plan to make capital expenditures for long-term viability and growth. Specify alternative ways to accomplish objectives. The major activities in the planning stage are: defining major objectives, specifying strategies for accomplishing objectives, and initiating the program planning process.

The long-term planning process begins with a mission statement that reflects the entity's purpose, specifies objectives to be reached, and identifies viable paths (or strategies) that may satisfy these objectives. The mission statement should be broad enough to be flexible and noncontroversial. It should require very few modifications over the years. The fiscal policies supporting that mission statement can be more specific and subject to revision as the situation changes.

If the organization does not have a statement of purpose, it should develop one. If there is an existing "outdated" statement of purpose, the statement should be modified. Once the statement of purpose is clearly established, more specific long-term objectives consistent with this purpose should be defined.

Next, devise ways to accomplish these objectives. There may be numerous such strategies, some more feasible than others. The purpose at this stage is to consider many alternatives, not to assess them in depth. Detailed analysis ...