No matter how big or small you go, every project needs money! From large complexes, to a backyard Wendy house, you need to make smart financial moves.
But here’s the thing, the bigger, more complex your project, the more you might need to break the bank. You also need to take into account time. And as with most companies, there aren’t unlimited resources, so it is crucial that every project is well-budgeted for!
The challenge? It’s not easy to have a fixed budget for the project regardless of its size. Many people often underestimate the requirements of a project, ending up short-staffed or worse, an unfinished piece of work. On the other hand, overestimating risks getting knocked over the head.
So, what is the best project management budget solution? Let’s get into it.
When budgeting for a project, much like a business budget, you need to make sure that your project budget plan considers a few things such as:
Your project management budget needs consist of expenses like direct and indirect costs, operating costs, capital expenditure, as well as deliverable costs and so forth. Putting together a project budget can get complicated and frustrating, especially if it’s your first project, or trying to figure out unforeseeable expenses.
You need to make sure that you take a breath. After all, you’re only making estimates here. Also, remember that your budget may never align with the actuals as your project unfolds.
The best thing to do is to focus on putting your best foot forward when capturing resources. Make sure you’re a realist, however, without being conservative.
Another challenge when setting up a budget for a project is the unknown. You can have the most detailed estimates, but unexpected delays, changes as well as additions can quickly rise, leading to the need to revise your budget.
So, think about your project plan, as it incorporates curveballs in timelines, it is equally imperative that you set aside emergency costs in your project budget; always have a contingency plan.
Your contingency budget is always the toughest to estimate because it takes into account all the unknown. The rule of thumb here is to set aside 10% of your total budget into your contingency pocket.
It is important that you have a clear view of current costs and expenses in order for you to be able to compensate or adjust your budget so you have the perfect game plan.
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