Survey and Research Data

 Budgeting Used for Action Planning Purposes

In order to investigate the reasons for budgeting among Australian organisations, 335 survey respondents were asked to identify the extent to which they regarded 10 reasons for budgeting as being important or beneficial to their organisation. Budgeting (results ranked in order) was used by organisations primarily for the following reasons:

1. Controlling costs
2. Board of director monitoring
3. Formulating and improving action plans
4. Coordinating resources
5. Business unit evaluation
6. Encouraging innovative behaviour
7. Staff evaluation
8. Managing staff performance
9. Determining required selling prices
10. Providing information for external parties.

Interestingly, formulating and improving action plans was ranked third highest. Organisations considered budgets to be a useful form of control for facilitating future activity planning. When departments were asked to prepare budgets, they were also forced to reflect on the types of future activities/projects upon which they wished to embark, and to cost these activities. [7]

Business Plans Not Formally Used by Home Businesses

Responses to a 2007 HomebizBuzz online poll concerning business planning indicated:

• less than 20% of home businesses created and actively used a proper business plan
• almost 18% did not have any plan
• some 40% reported that they had a plan, but that it was mainly in their heads. [8]

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