SIX GOLDEN QUESTIONS
If you’re the type whose brain goes numb looking at numbers, and who boggles at the thought of budgets, DON’T PANIC – here are
“Six Golden Questions”
you should ALWAYS ask about the Financial side of any Project you have to become involved with:
1. Who holds the Funding at the moment? Is it actually formally ‘committed’ yet - and when & how does your Project actually get its hands upon the money? What might cause delay? Can you see actual evidence to confirm their agreement and their terms?
2. Overall in the financial planning, are the amounts coming IN bigger than those going OUT? If not, who or what will fill the gap – and is that formally ‘committed’ yet?
3. Do the sums in the Forecasts actually add-up? Never, ever, take this for granted – even (in fact especially not!!) with computer spreadsheets. Are the assumptions that have been made realistic? And how do you and they know that they are?
4. Have the Project Planners forgotten to include any Costs? (Try to eliminate nasty surprises by thinking forward to the mundane practical side of how things will work once the venture is up-and-running – stuff like insurance; security; recruitment costs; marketing after the start-up; cleaning & waste disposal; signage; internet access; holiday relief cover. Remember that ‘Salaries’ and ‘Staff Costs’ are not by any means the same thing . . . has that been allowed for?)
5. Do the Timings work? - does enough actual Cash come in before the Bills have to be paid? Budgets and Cash Flow Forecasts are not the same thing. (Promised funding due next quarter won’t pay the Staff’s wages next week – “CASH IS KING!”).
6. Is there any Margin for Error – in the Timings and Take-up, as well as in the amounts of Income & Expenditure? Few Projects ever go exactly to plan, to budget, or to time, so modest ‘contingency reserves’ are highly desirable.
If you have clear, unambiguous and satisfactory Answers to these simple Questions, then you’re three quarters of the way to understanding any Project, and there’s a pretty good prospect it will actually work.
If you don’t have such Answers, however, then you should keep on asking these Six Golden Questions - very slowly and very patiently, but persistently - until you do. Don’t be put off – even ‘professionals’ can be wrong sometimes. What you eventually uncover may surprise you!