A Base Budget is a revenue budget set conservatively enough that a company expects to beat it in 90% of scenarios, with expenses then budgeted 📝Bottoms up to stay within the desired runway.
Annual budgeting in this approach begins with 📝Boundary Conditions, which lay out the 📝Tops Down growth targets the company wants to hit and the runway it wants to keep, as measured by 📝The Runway Calculation. The Base Budget turns those limits into a revenue number the company can rely on, and each expense is then built from the bottom up so spending fits within the runway the boundary conditions allow. Because the revenue figure is set to be beaten nine times out of ten, expense plans built on it hold up when revenue comes in low.
The Base Budget is paired with the 📝Stretch Budget.
If you keep missing your base budget, look yourself in the mirror and think about your 📝Forecasting Psychology.