5 Tips to Create a Good Project Budget

cost management Mar 10, 2019
5 Tips to Create a Good Project Budget

Starting a project with a proper budget is one of the best ways to be able to manage the budget. Here are five tips for creating a solid budget:

  1. Develop a deep understanding of project requirements: Know what the stakeholders really need and want so your budget is stronger. Don't forget to do a WBS with the team too.
  2. Work from the effort, not duration: Task level of effort is a better gauge of resource expense. Duration, which will take into account overhead time, may needlessly increase (or decrease) the budget.
  3. Include all costs: Make sure you understand all the fees (e.g., shipping, usage), taxes, and any other charges you will encounter. For longer-term projects, consider price increases and inflation in general.
  4. No surprises: Be sure to include a reasonable amount for contingency and management reserves, so risks do not throw you completely off course later.
  5. Use multiple approaches and get buy-in: Looking at the budget from different perspectives will help you validate you have a well-developed budget.  Asking for buy-in from key stakeholders will get you valuable feedback for adjustments.

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