Page 35 - 2021 MHA Start-up Guide

UNDERSTANDING YOUR BUDGET

Your budget isn’t simply a spreadsheet with anxiety-inducing numbers . It’s a yardstick against
which you measure your program’s actual operating results; it’s a way to quickly assess the health
and sustainability of your program; and it’s a plan for future operations . We’ll go over some basics
about budgeting for mobile healthcare here, and you can find a sample budget in the Appendix A
at the back of this Guide .

If your Program is part of a larger organization, your budgeting process may have begun in a strate-
gy planning meeting with senior management; your mobile program is just one line item on a larger
bill . That likely means every budgeting decision you make will have to proceed through several
layers of approval . If you’re part of a smaller organization, you may not have as many eyes on your
numbers, but it’s even more important that you do your due diligence as you plan for expenses .

Large or small, to succeed you need to think of your program as a business, at least as far as bud-
geting goes. Just as all businesses look closely at cash flow, you’ll have to consider the money
that’s coming in (e .g ., fundraising, grants and/or client revenue) and going out (e .g ., operating ex-
penses) . And, just like all (successful) businesses, you should be tracking your expenses each and
every day, including those incurred on site!

Operating margins
Your margin is the financial cushion available for emergency expenditures or to maintain service in
case of loss of funding. How big a margin should you maintain? That depends on your program’s
particular needs. A smaller margin (30 days or less of funding) may result in difficulties in the event
of an emergency or sudden influx of clients. A larger margin, on the other hand, may be saving
money that could otherwise go toward client care .

In some cases, you can determine margins by looking at past budgets and expenditures . Estimat-
ing client numbers is a useful way to establish a margin, because client volume affects operating
costs . For example, the more clients you serve, the longer you’ll need to keep a vehicle running and
staffed every day, and, potentially, the more staff members you’ll need. If you don’t have historical
data to draw from, consider looking at the margins of similar mobile programs .

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