Wednesday, January 2, 2013

Fire Department Financial Resolution #1

A lot of fire departments have poor financial practices.  We'll look at a few and help make a resolution to help yourself fully fund your needs.

Resolution #1 - Plan, plan, plan
Most people avoid financial planning like they avoid going to the dentist.  It's not fun and it's hard to do.

Yet, the biggest single factor between the haves and the have not's is just planning.

Fire departments who develop and manage their plans are much stronger financially than departments who don't plan.

I see it every day when I have financial discussions with fire departments.  Those who plan have more budget, more savings, and better equipment.

Here's how you plan
  1. Have an annual budget.  A budget is just an educated guess at how much you'll receive and how much you'll pay to run your department each year.  You won't be 100% on target but you'll know what happened and can adjust accordingly.  A budget is a guidepost to good financial results.
  2. Plan for major purchases.  About once a month, I get a call from a department who just saw a shiny new demo truck last night and impulsively decided to buy it.  No planning for this purchase, no review of the consequences of a major purchase on their long term.  A major purchase is just that - a major purchase.  Departments who plan know 2- 3 years before they buy so they adjust and plan accordingly.
  3. Share your plan.  Most successful departments share their plans with their communities and governing bodies (councils, etc.).  This impresses those people you've got your act together.  It gives a council enough time to consider and act upon a decision to buy a new truck.  They aren't rushed into making a big decision.
As the saying goes, "Failure to plan is planning to fail".  And I see a dramatic difference between the planners and the non-planners.  If your department needs more budget and equipment, a plan is the best beginning to getting there.

Stay safe!
John R. Hill
First Bankers

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