Project budget planning: what is it and how to do it?

Before the project begins, it will be good to understand the budget that will be available and how much of that will go towards each activity; attention, therefore, has to be placed on planning for the budget of the project.

This planning will determine the values ​​and resources available for the project to be successful.

What is a project budget?

A project budget is actually a breakdown of the expenses likely to be incurred in a project. It will become a document that details the cost of each activity and resources needed to carry it out.

If the project budget planning is not thoroughly developed, the project can be seriously affected. For example, suppose that those responsible for a project forget to include the cost of 10 bags of cement. This could possibly affect both the construction of the property, since it will have to be paused, and the budget, since the expense had not been anticipated.

This is also the case in the corporate world. Projects in this sector require precise planning to avoid surprises.

How to do project budget planning?

Project budget planning is the time to prepare the project budget, that is, the organization of the costs and resources required by activity. See below the 9 steps of project budget planning:

1 – Defining objectives

Nothing happens without defining a goal. So, before even starting a project, it is important to understand what goal the company wants to achieve. After all, getting the ideal project for a given activity wrong can lead to many losses.

For example, say you have a blog you want people to visit more often. Still, on social media, the best positioning is not done. To state it differently, does it make any sense that you raise traffic to your blog using social media as a channel to promote your blog? In this case, the ideal project would be one that upgrades your SEO strategy by hiring a person who can specialize in it or getting training for the person who takes care of that part of your work.

But what has to be kept in mind, always, is that it needs to make sure whether the goal is a SMART goal—that is, the goal needs to be specific, measurable, attainable, relevant, and the deadline must be fixed. Using the website example still, let’s say that today your number of visits are 300 thousand visitors a month.

By how much would that be an increase? Well, setting goals like “increasing followers” doesn’t give you any idea of where you actually have to get, so it would be more interesting to set a goal in this case of increasing the number of visitors by say 15% to 345 thousand visitors/month.

2 – Project scope definition

Objective defined, it is important to define the project stages. In the example above, we are talking about a project that would help increase visits to a website, so let’s assume some stages here:

  • Hire an SEO specialist to analyze the numbers;
  • Make action plans to resolve website issues;
  • Prioritize activities, such as revitalization list, broken link list, orphaned content, etc.
  • Organize a content calendar;
  • Define consistency of posts;
  • Define what you need for the post
  • Create analysis routine.

This is an example of a scope that already establishes which activities will be carried out and allows you to have an idea of ​​how much will be spent. It is in the scope that you will be able to understand which resources you already have and which ones you will have to acquire. Therefore, defining the steps is essential in project budget planning.

Furthermore, it is in the scope that you will be able to define the execution time and even predict the return on investment (ROI).

3 – Segment deliveries and sub-dependencies

In addition to the scope, it is important to segment and define the deliverables. In other words, this is when you will provide more details for the scope and understand if there is any important point missing to consider in the project budget planning.

For example, in the example of the increase in visits to the blog, let’s assume that a person specialized in technical SEO had gone unnoticed. It is in the details that you can still identify and include the need for this resource.

4 – Identify direct costs in project budget planning

In the example project, it can be seen that it would need the following resources: at least one SEO specialist, at least one writer with experience in writing for SEO and at least one IT, computer engineering or similar professional for the technical SEO part. A tool for organizing content production and at least one tool for performance analysis. And licenses for the technical part of the website.

Once resources have been identified, we move on to the search and value estimation stage. To define the amount of capital needed to hire professionals and tools.

Suppose that in this case, a copywriter already exists, but he or she does not have the necessary knowledge to work with SEO. Therefore, the company’s option will be to pay for some training courses for this professional. Therefore, these courses should be considered in the project budget planning.

5 – Identify the indirect costs of the project

In addition to direct costs, indirect costs must also be identified in the project budget planning. For example, will it be necessary to purchase equipment for project collaborators? Will they work from home? If so, will an amount be sent to cover expenses such as electricity and internet? If the project is in-person, have the costs of the location, such as rent, water, electricity, and telecommunications, been included in the planning? In short, all of these expenses must also be included.

6 – Create a disbursement schedule

The disbursement schedule is the part of the expenses related to the project. For example, a software license can be paid annually and monthly. How will this cost fit into your budget planning?

Furthermore, salaries and payments of indirect resources, such as rent, need to be divided monthly.

This way, it is possible to identify lows, that is, months in which the expense may be higher and vice versa. Let’s suppose that the consultant was hired for only 3 months, this cost will only be distributed over that period, instead of 12 months, do you agree?

7 – List reserves in project budget planning

To avoid the unexpected, it is also important to consider some financial reserves as a monthly cost. These need to be well organized in the project budget planning, so that if an unforeseen event occurs, the project will not be completely abandoned.

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