A good management plan is based on a(n)

• A. Five-year capital plan
• B. Operating budget for 1 year
• C. Three-year strategic plan
• D. Long-term forecast

Answer: (B)

The operating budget for the coming year is the foundation of a good management plan because it translates goals into concrete, short-term financial actions. It lays out projected income and the day-to-day expenses—like staffing, maintenance, utilities, and supplies—so resources are allocated to support planned activities and priorities. This annual budget also serves as the baseline for monitoring performance and making timely adjustments as actual results come in. Longer-term tools like a capital plan, a multi-year strategic plan, or a long-term forecast are important, but they guide future directions or big-ticket items; they rely on the yearly operating budget to implement and measure progress.