How Much Should I Spend On Team?

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Whether you have a growing enterprise or a barely starting small company, every business operation boils down to one thing: money. Budget planning and allocation are vital tasks in every business activity. No project, production, or strategy is complete without a reasonable budget backing it up. No matter the nature of your business, monetary resources play a massive role in its growth and success.


Managing a corporate budget is no walk in the park. It requires careful planning and discipline to come up with a realistic yet practical money allocation that can work for the benefit of your company. It is much like creating a household financial plan, but more complex and complicated due to its sheer size, structure, and objectives.


The actual amount that you should allocate depends on several factors such as the number of departments you have, the projects you want to implement, the overall operating budget, and a million other things. Here are some guides to help you determine how much you should spend on each team’s project.


  1. Know Your Organization & Team


A company is composed of several departments and teams such as marketing, sales, and IT. First, you need to know and understand how they operate, their objectives and goals, and the projects they want to present that can directly impact the company’s success.


Talking with your team gives you a firm idea of each department’s internal operations, thus gauging its importance and aligning it to the current needs of your business. For example, let’s assume you are allocating a sizable amount to the IT department to begin automated transactions to all internal and external affairs. This decision will directly influence an increase in business productivity, which will lead to growth and success.


  1. Use A Baseline Budget


All existing departments at your firm have a current financial plan. Carefully review the department’s financial details and see if they have utilized their financial resources effectively. Get all of your questions answered by your respective department’s teams. You may not agree with the existing budget, but you can use it as a baseline for the new set of money you will allocate.


  1. Be Realistic


Companies have different bases when it comes to their budget. Some may base it on the net income, and others depend on the firm’s cash flow. Before creating it, you should first review past financial results and see the current company metrics to get an estimate of the firm’s financial capabilities.


Review the fixed and variable costs. You can also take a look at items that fluctuate through years. What caused it, and can it be controlled? Using financial data from the past and correlating it with the current metrics allows you to come up with a realistic budget. You get a business plan made from a concrete basis, not just some targeted number.


  1. Be Flexible


Aside from setting a realistic money allocation, you should also make it adaptable to potential financial problems that might arise. Position your budget in a way that it can be amended to be in line with how well your organization does as the year goes by. Revisiting your financial plan from time to time is a very healthy way to manage your company’s finances.


Be ready to reduce budgets and sacrifice some projects if target earnings are not met. You should be able to look at the big picture and always decide for the greater good of your business.



Budget allocation and management is a tricky endeavour. Before deciding how much to spend on your respective company teams, you should first know your organization and the teams behind it. Set your budget in line with the current goals and needs of your company. 


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Annette Ferguson

Annette Ferguson

Owner of Annette & Co. - Chartered Accountants & Certifed Profit First Professionals. Helping Online service-based entrepreneurs find clarity in their numbers, increase wealth and have more money in their pockets.