What is zero-based budgeting?
Zero-based budgeting was popular some time ago, but I don’t think people are using it much anymore. However, the concept is still used a lot. What it basically means is that every number you put down in the budget is a number that you can track through to a particular month of the year. Some things that are consistent across the year are salaries, etc. Other expenses will vary based on what you have to do. In a zero-based budgeting you have to justify every number on your sheet from scratch or from zero, which is where the term comes from. The entrepreneur is doing a zero-based budget for the first year. He has no numbers to bank on or to copy from the last year.
