Affecting the Bottom Line
As much as budgets are one aspect of the project you're managing, they are also a project in their own right. You must have time to plan and research, you need documentation, and you have to identify your resources — which may include either a financial planner or a small loan.
Time plays a key role in your budget in two ways. First, you need adequate time to cover all your bases when preparing the budget. This can be very difficult if someone wants it done yesterday. If you're under great pressure, overestimate the major areas so you'll have some money in reserve when details in those key areas rear their ugly heads. For example, if you're installing a new computer system, you may budget for overtime and incentives under staffing costs. If you're not familiar with the new system, or who you will assemble as your team, it would be a good idea to factor in the cost of a specialist as well. If you don't need a specialist, then the worst thing is that you've come in under budget. The more time you have to prepare your budget, the more carefully you can examine all of the details.
Time is also a factor when planning your budget. How much time do you have to complete the project? A project on a short schedule may not afford you the luxury of lower costs. A printer, for example, might be able to have your programs for opening night ready in six weeks for $600. However, you only planned to do this show three weeks ago; hence, you'll need the programs in two weeks. This will be a rush job and will cost you $900. A shorter project time frame usually means higher costs. Whenever possible, try to plan far enough in advance to avoid paying higher rates or rush charges when something is needed in a hurry.
The need for experts will also affect your budget. No, you probably won't need a professional wedding planner to plan a wedding unless you don't have enough time or are anticipating an unusually lavish affair. Most often, family members plan the wedding and either the bride and groom or their parents become the project managers by default. On the other hand, you may need to hire an aeronautical engineer before you can proceed with your project to reroute a runway at the international airport. There are many levels in between these two scenarios that will require you to bring in someone familiar with the task at hand. Factor in more money for experts, knowing that in the end the job will be done right. Make sure you get a firm estimate of how much the expert charges and how long he or she will be needed on the project. Also, make sure experts communicate in language that everyone else on the team can understand.
Supplies are another key factor in your budget. Make sure you know exactly what you need to buy or rent before you start. Make a mental picture of whatever it is that you are building, moving, planning, or creating, and determine what you'll need as you proceed through the project. Often, when doing projects at home or with friends, family, neighbors, or in the community, team members bring in or donate the majority of your supplies. If your neighbor already has a ratchet set, and he's helping you build the tool shed, borrow his if you can. Always make sure you know what you're getting.
Try to pad the budget by 5, 10, or even 15 percent to allow for extra cash for supplies. When things break (and they will) or you're running short on an item (and you will), you'll still have some money left to cover unplanned expenditures.
While you probably won't count every paperclip (unless the sponsor has you on a very tight leash budget wise), you'll need to maintain a firm grasp on where supplies are going and what they are being used for. Look for places where you can double up. For example, if someone needs to work on a computer for only one hour a day, let them use someone else's computer while that individual is at lunch. It's not cost effective for this person to have his or her own computer.
Also, be aware of availability in an office situation. Just because no one has used those three offices on the third floor in six months, it doesn't mean they will be available next week. You may need to rent office space. Make sure you cover all bases and double check all availability when renting, borrowing, or using existing materials. Here are some other budget tips:
Include everything you can think of that might cost you or your sponsor money — from nuts and bolts to a city permit to importing the fake snow for the Christmas pageant.
Research rates and prices carefully. Get quotes. Find out what the quote does and does not include.
Look for places where you can beg or borrow (but not steal) supplies or materials.
Determine how much more contingency plans will cost you. Will moving the wedding indoors cost $2,000 more than having the outdoor affair you are planning? Are you prepared for that expense?