Running Head: Budget Planning and Control
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Budget Planning and Control.
Babycakes is a business enterprise started in 2015 by Erin McKenna. It is the most popular
vegetarian, a gluten-free bakery in New York, with another outlet in Los Angeles. The opening of
this new Babycakes outlet meant a lot to Erin as it presented a chance for growth. Starting any new
venture requires proper planning to avoid failure. The first step to the success of her new outlet
was creating a realistic budget. A Budget is an evaluation of income and expenditure of business
for a specified period either annually or quarterly or as per the business needs (Bizjournalscom,
2017).
Budget planning is a long-term summary indicating the manner in which money spending on
items and how the expenditures are financed. The idea of Erin setting-up a Babycake outlet in LA
would require proper planning and a detailed startup budget. A realistic budget would be necessary
to show how much money goes to equipment such as mixers, pans, and utensils, also in cooking
ingredients such as cooking oil, decorations, sugar, salt, flour, and icing.
Also, the budget would serve as a guideline to ensure that the two Babycakes outlets run smoothly
while making profits. Managing two businesses in a different location would be very difficult in
the absence of a proper budget plan. Therefore, according to Erin, setting up a realistic budget was
vital to the success and growth of Babycakes business. Apart from assisting in managing future
business plans, a realistic budget would also; help the company to maintain financial focus and
ultimately meet its goal. Lack of a budget leads to a market that lacks economic direction, in that
commercial commitments, are not planned, making the industry to always run on debts. Setting-
up an adjustable budget, assist the company to be flexible in performing its daily business activity.
The fact that the LA Babycakes would be a start-up business would make Erin consider frequent
