How does an arts organisation set its annual budget? This short guide looks at the principles of budgeting, the income and expenditure budgets (including different methods of ticket pricing), monthly budget profiling and VAT.
There are two different methods of setting a budget:
• Using last year’s figures and adding inflation or a % increase.
• Looking at need, reflecting the artistic programme and priorities for the company and its marketing department.
The first is common – we don’t have time to pull apart every budget head every year. We quite often don’t know the detail of our artistic programme, and we are often responding to changing priorities of our funders at short notice! The second is preferable and is possible to apply if you are in a small organisation or if you are managing one aspect of a budget.