Hi, welcome back. Now, let's talk about revenue budget in more details. Do you remember what we discussed before about the budget and the strategy? As we said before, the budget is not a standalone managerial instrument. Strategy and budget are connected. Let's look at this slide again. We see here, that the budget is a consequence of this strategy. If we think the strategy as being a dog. Then the budget should be closer to the dog's tail. And remember, the dog wags the tail, not the opposite. So the message here is, the budget should not be an end in itself. Its a means to put the strategy into action. Now, lets warm up for the revenue budget discussion. In my professional career, I've been through a situation like this, hey, let's improve the budgeting process. Have you been to such a situation? Yes? Not yet? Anyway, what I can tell you is this, every time I participate in a project like this, the efforts were huge and the results, not that good. Yes, maybe I hadn't been confident enough. That's a possibility, why not? Anyway, why is that so difficult? That's because a budget has many interconnections, changing the process means, you have to deal with those interconnections. You change one thing, then you should change the other things that are connected to that thing. And this is more evident when we think about revenue, now finally talking about the revenue budget. Here's our starting point. The revenue budget up there. Revenue is the key driver of a business. It's one of the evidence of a company's strategy in action. And what are the revenue drivers? Mostly, products and services. They can be included in the budget process as physical numbers, in units, or in monetary basis. You may also mix physical and monitoring numbers to have an overall picture. Look at the example here, in the reading material, here we have three product lines. Imagine that, managers have decided for a portfolio management approach, so that the main approach for operations is based on products and services. In this case, the revenue budget should be structure by product lines, like this example here, we can see here that each product has a sales forecast in physical numbers, I mean, in units. Then we have the price for each product lines. And finally the gross revenue is calculated. Sales discount policies, may maybe applied. Then we have the budgeted net sales for each of the products. In the end of this process, for each product line, we'll have the total net sales in monetary basis. In a nutshell, budgeting revenue by product lines means, you'll do it for all products of the company's portfolio. Should the company be a service provider? No problem at all. You can use similar approach to developing the revenue budget. Well, to summarize the topics of this video. One, we briefly reviewed the concept of budget related to strategy, and two we discussed it, one of the approaches to structure the revenue budget by product lines. In the next video, we will see two other approaches for revenue budget. Stay tuned and see you.