For this assignment I interviewed Adam Zimmerman, CEO of American Equipment.
1. What is the most common budget constraint you frequently run into and how can it be fixed?
Getting customers to pay. We have ramped up our collections efforts by adding more people to our AR team
2. What is your favorite thing about budgeting at your company?
Makes us focus on the future.
3. What do you find to be the most difficult about budgeting?
All falls back on AR. If money comes in it makes it easier to budget and plan
4. How does budgeting affect your employees & customers?
Forces employees to really evaluate the real need of a purchase. The goal is to lower unnecessary expenditures which increases profits and increased wage and bonuses. Hopefully customers see a lean and efficient company they are buying from.
5. What is your least favorite thing about budgeting?
The future. Business ebbs and flows. We need to make purchases for worn down equipment or in order to grow, but we need to make sure we have enough coming in to cover those costs
6. What is the main cause for being over budget?
Careless spending and people not being accountable
7. What is the main cause for being under budget?
Attention to detail and clear direction from upper management
8. How often do you think the little things add up to help you stay under budget?
Can’t quantify. We have 100 employees with credit cards. Uncounted for $100 purchases by employees are killer. They add up fast
9. Who helps oversee the budget for the company?
10. How often do you make changes to your budget?
11. What is the most common problem you run into while budgeting?
12. How often do you fire employees as a way of decreasing your budget?
Rarely to never. We are very cautious about the people we hire and do our best to put people in long term positions. It is a delicate balance. We would rather have folks get overtime when we are busy than layoff because of too many people when times are slow.
This interview was interesting to learn about how a CEO views budgeting in the company. It was interesting to learn from his perspective that little costs add up fast and can hurt the company, which may hurt employees which he doesn’t want to happen within his company. I also didn’t expect their budget to be revised daily.