Community associations are essentially businesses, and board members should treat planning and budgeting the way they would approach corporation planning. Here are tips on how to start.
Community associations operate like a standard business. Sure, the board members are volunteers and are elected by popular vote, but most everything else matches up. For example, as with a corporation, an association must manage accounts, budgets, vendors, staff, and more.
Because businesses must create detailed goals each month or year and a set strict business plan, doing so in your association will also bring you many benefits. This includes establishing a mission statement and overall vision, planning ways to get community members involved, and staying on top of all financial tasks, whether requirements or just best business practices.
Here's a look at how you can incorporate standard business practices into your association's plan this year.
Mission and vision statements
Creating a clear vision for any organization, association, or business is a crucial part of establishing alignment and focus. This is a good idea for your association as well, so there is a solid message or feeling that is conveyed with every communication and decision from the board.
To brainstorm and set a vision, have the board members ask themselves a variety of questions, such as:
- How is our association different?
- How do we want the community members to view us?
- What's more important for us: keeping with a long tradition or being adaptable to change?
- What can we do with our budget and space?
- What are the common interests and priorities of community members?
Your mission statement can then reflect how the association strives to stick to a set vision and mission in its actions and responsibilities. Display this message on the website, distribute it to community members, and reinforce it regularly so that people can align and support it.
This vision is a crucial step in the goal-setting process for your association. And, because volunteer board members rotate in and out, the mission statement will help new leaders get aligned right away.
Getting people involved
Good business managers put the needs of their employees into the business plan and ensure that the team feels like a close-knit community.
With associations, it's important to create groups and committees where people can get involved. These volunteer groups could involve them in anything from Christmas decorations and event planning to lawn care and landscaping and security volunteers.
Giving community members more involvement opportunities is a great way to ensure each person's opinions are heard. These groups can set their own goals that align with the association's established mission.
Current board members should encourage community members to run to fill board openings, too, just as a business would encourage employees to consider promotions.
Being smart with financials
Creating a strict budget and sticking to it are very important aspects of running a successful association. Budgets are typically made by management and the treasurer, or some associations even have community members form a budget committee, comprised of people with financial experience.
Whichever way your association approaches budgeting, remember that it should be treated like a business's financial plan. Cash flow needs to be managed and tracked each month. Big expenses need to be discussed and approved in board meetings. There needs to be some kind of reserve fund for emergencies.
Hard decisions need to be made if the monthly dues needs to change or a special assessment needs to be implemented. Remember that you need to address the association's specific governing documents to ensure that you're meeting guidelines or limits for raising fees.
Insurance policy considerations are another big part of governing an association. Make sure you get the coverage you need and that you work it into the budget each month. Security measures should also be in place, as with any business, to help protect funds from financial fraud, so discuss these topics with your legal representation or financial experts when working on your strategic and financial plan.
Once you've taken these steps to plan like a business, remember that a good strategic plan is reviewed and updated regularly throughout the year.
When you're ready to take your community association's strategic planning to the next level, our Florida real estate and community association attorneys at PeytonBolin are ready to help. We assist clients with real estate law, community association law, and much more. Contact us today for a free phone consultation.