Absolute and Relative Budgeting
To ensure that your budgeting and allocation is aligned & focus on the strategic priorities and on your money-making machine, one should adopt a mix of two methods. One is to allocate the money as per the needs of core priorities, and then distribute the rest of the monies to the non-core areas. This is the absolute approach. After you have done this, the next stage is to normalize your budgeting. You can look at the %age distribution of investments across your mission-critical, important and desirable agenda and see if the distribution makes sense. The other aspect of the relative investment is the time-span of the investments. If the investments related to your core priorities are skewed towards the later part of the year, there might be something wrong.