Zero-Based Budgeting for a New Business Venture 1
ZERO-BASED BUDGETING FOR A NEW BUSINESS VENTURE
by (Name)
The Name of the Class (Course)
Professor (Tutor)
The Name of the School (University)
The City and State where it is located
The Date
, Zero-Based Budgeting for a New Business Venture 2
Zero-Based Budgeting for a New Business Venture
Introduction
This research report focuses on zero-based budgeting (ZBB) as one of the ways of
formulating budgets for the establishment of a new business venture. Being in charge of
formulating financial policies for the new venture, I have been tasked with investigating how
budgeting procedures aid in making effective decisions in the process of setting up a new business
entity. This is because the budget shows how a strategy has been implemented financially, while
the method used to develop the budget determines how resources will be allocated, cost controlled
and how flexible the project is in reaction to changes in the business environment (Coyte, Messner
and Zhou, 2022). This is because the start-up has no historical spending pattern that can be used
to formulate the budget.
The purpose of this report is to develop an evidence-based understanding of the ZBB
approach that would be useful for determining the financial policy of the new venture. The report
begins by explaining what the ZBB approach is all about and how it works, followed by
comparison with other approaches to budgeting. Further, the report analyzes the pros and cons of
using ZBB in the case of a startup and the concept of zero-based thinking behind this budgeting
approach. Finally, the report discusses incremental budgeting as another option available for
budgeting, analyzing how it compares with the ZBB approach.
Zero-Based Budgeting and Its Application in a New Business Venture
ZERO-BASED BUDGETING FOR A NEW BUSINESS VENTURE
by (Name)
The Name of the Class (Course)
Professor (Tutor)
The Name of the School (University)
The City and State where it is located
The Date
, Zero-Based Budgeting for a New Business Venture 2
Zero-Based Budgeting for a New Business Venture
Introduction
This research report focuses on zero-based budgeting (ZBB) as one of the ways of
formulating budgets for the establishment of a new business venture. Being in charge of
formulating financial policies for the new venture, I have been tasked with investigating how
budgeting procedures aid in making effective decisions in the process of setting up a new business
entity. This is because the budget shows how a strategy has been implemented financially, while
the method used to develop the budget determines how resources will be allocated, cost controlled
and how flexible the project is in reaction to changes in the business environment (Coyte, Messner
and Zhou, 2022). This is because the start-up has no historical spending pattern that can be used
to formulate the budget.
The purpose of this report is to develop an evidence-based understanding of the ZBB
approach that would be useful for determining the financial policy of the new venture. The report
begins by explaining what the ZBB approach is all about and how it works, followed by
comparison with other approaches to budgeting. Further, the report analyzes the pros and cons of
using ZBB in the case of a startup and the concept of zero-based thinking behind this budgeting
approach. Finally, the report discusses incremental budgeting as another option available for
budgeting, analyzing how it compares with the ZBB approach.
Zero-Based Budgeting and Its Application in a New Business Venture
