And Carrie On

The budget. It may not be fun, but it is so important to do our work well.

Truth moment, as a new MarComm leader, I did not understand the seriousness of the budget and the budgeting process.

I had been in the role for about a month before I had the budget codes, and even then I didn’t know what to do them.

For new MarComm leaders, budgeting is one of the scariest and likely least trained aspects of the role. Chances are new leaders have marketing experience, some experience managing others. However, they likely have little to no experience with budgets.

I was the same. I inherited a budget spreadsheet that was more of a list of expenses, and I had some dollars in the system that showed what I had to work with. However, there was no guiding document to understand what I was looking at or how it aligned with the strategic initiatives we wanted to achieve.

In some ways, it was a recipe for disaster. And no surprise, I failed.

By the time I got my head around the budget and began to understand it, I was five figures over budget.

Carrie Phillips

I Was Not Alone

Thankfully, I was able to trim and make adjustments to solve the budget crisis, but the sad news for me is this situations wasn’t just me. I have heard from several MarComm leaders over the year about the real struggle with budget.

That struggle is a bit of the backdrop to today’s post. If we’re going to have a successful generation of future marketing leaders, one think our current leaders need to get better at is talking about budget. It can’t be a myth anymore.

Types of Budgets

When your institution begins the budgeting process, it’ really important to understand the types of budgets you may face. That’s important because it’s going to change how you prepare for budget meetings and the budget planning process.

Below is a high-level discussion of each type and how you prepare for it. However, you can find much more on the types of budgets out there.

Zero-balanced budget – This budget means you start every year at zero and must justify your expenses and your rationale for all dollar spent. This kind of budget gives MarComm leaders the greatest opportunity for new resources. However, it also is one of the most time consuming because every expenditure will need to be meticulously planned, articulated, and shown how it brings value to the work. In this model, you would want to bring a fleshed out marketing plan and show the value of adding new initiatives in order to advocate for those fiscal resources. It is important to think through every detail of the plan and the needed expenditures for the entity because every item will need to be justified, and forgetting something could mean that item isn’t funded.

Incremental budget (historical budget) – This is the most common kind of budget because it takes what you did last year as a starting point. In an ideal world, there would be a small adjustment for regular inflation. However, that’s not always the case in higher education. In this budget, you keep the amount you had from the prior year, and can spend time advocating for additional dollars to do specific things. However, usually, what you have is already included as a starting point. This requires much less work to advocate for pre-existing things, but it can be harder to get new resources because every entity is also starting with what they had last year, so the overall pool of available resources is likely much smaller. In this scenario, you would want to really focus on new initiatives and how that could help the work.

Activity based budgeting – This is another kind of budget that focuses on the activities that are needed for desired outputs. Instead of focusing on a budget for a specific department, this would focus more on a specific activity and multiple departments may have expenditure line items to achieve that expenditure. For example, if the goal were to grow enrollment, the team my decide it would take “x” resources to achieve that. Therefore, marketing, IT, enrollment, and advancement could all have a role in the work. Marketing might receive funds for marketing, IT might receive funds for a technology investment, enrollment might receive funds for travel, and advancement might receive funds for engaging community partners. The focus is not the offices but how they support a specific goals. I have never worked under this kind of budget, but it sounds incredibly fascinating and like it could really bring cohesion among the key goals of an institution. In planning for this budget, it would be important to understand the key goals first and then how a specific department worked in support of them.

Value-proposition budgeting – This type of budget is also a mindset focused budget and it is aimed to insure that the most important budget parts are the parts that are providing the biggest value to the business. This budget model is based on understanding what the customer needs and then developing a budget that really focuses on that. To me, it’s a hybrid of zero-based and activity budgeting. It’s focused on activities but the activities are driven from what the consumer wants, not the institutional goals. It also resembles zero-based because of the importance of justifying expenses as they relate to those valued items that have been identified. I think this one is pretty rare in higher education, but I have seen it some in government spaces to help make decisions about what services are provided to residents. If you’re in this kind of a model, I think understanding the consumer and their needs and then being able to justify how your marketing work supports that would be of utmost importance.

Five Tips for Learning Your Budget

When leading a team with a budget (or starting in a new role), there are so many things coming at you, but one of the most important things to set you up for long-term success is to get up-to-speed on the budget.

Start backwards – When I started in my new role about 2 years ago, I started backward. I went through every expense over the past two years and categorized those into budget buckets (digital marketing, out of home, professional development, office supplies, etc) to see where the department was spending resources. From that, I could learn what areas felt too high and where there needed to be additional investment. By starting backwards, I had a good understanding of historical spends and could make a more informed budget plan moving forward.

Weekly check-ins – Budget is not my favorite part of the work, but I really force myself to put aside time each week to review the budget. Specifically I’m looking to see what is still outstanding, what areas in my budget are trending too high or low, and checking for mistakes. This 30-45 minute exercise saves me tons of heartburn as I near the end of the year because much of the budget work is already done and taken care of. When mistakes happen, they are much faster and easier to correct.

Keep detailed records – A budget is a moving plan at best. I find that often times marketing places ads that other areas pay for, and then we seek reimbursement. All of those transactions, if not documented well, can wreak havoc on trying to make sure your spend is accurate and up-to-date. At any given time I can have 5-10 other players involved, and those records are imperative to ensure the budget doesn’t get out of sorts quickly.

Leave budget for fun things – When you’re building you budget, don’t forget the fun things. It’s important to have dollars left for testing new strategies, professional development, and promos/giveaways. This doesn’t have to be a huge amount of the budget but forgetting to allocate them can negatively impact team morale. When something new comes along, you will want the resources to try it out, and similarly you want to be able to support your team’s learning through conferences, webinars, etc. Making sure there are some unspent funds for these kinds of purchases is a huge morale booster and helps the team stay nimble.

Talk to your finance team – This is one I did not do soon enough. There are so many nuances to the actual budget process that it’s really important to understand how the institution wants to handle things. For example, different places have different levels of required permissions, sometimes things can be paid directly from a contract and sometimes a purchase order is needed. It really depends on how the institution wants to handle these kind of logistical items. That’s why it’s really important to work with the finance team to understand their practices to make sure you’re in lock step on the work.

What Am I Missing?

For those who are more seniors higher education leaders, what am I missing? What budget processes do you wish you’d known about?