Economic development within Indian Country is being pushed forward at increasing speed as Tribes learn to utilize both operating and capital budgets because these tools coordinate the allocation of resources, i.e. people, money, equipment, land and building, etc. Success may still be had without utilizing an operating and capital budget but likely at a slower pace.
Operating and capital budgets tie-together goals, strategy, and tactics of an organization. An operating budget is a detailed projection of all estimated income and expenses based on forecasted sales revenue during a given period, usually a year. A capital budget is the planning of long term corporate financial projects using debt or equity to increase the value of a business, usually three to five years but can be longer. An operating budget is a short term budget; a capital budget is long term.
A primary goal of Tribal economic development is to increase the value of a portfolio of businesses so sufficient cash is produced to support a community. A business increases in value as it is able to improve both gross sales and net income after operating expenses and finance charges which is dependent upon management’s effectiveness to plan, understand, and execute an overall strategy. Additionally, success can be defined in many different ways but usually tied to profit because the purpose of a business is to make profit and a result of profit is cash, the lifeblood of an organization.