Managing Your First Project: Project Management Quick Start by Ghantt Thomas

Author:Ghantt, Thomas [Ghantt, Thomas]
Language: eng
Format: epub
Publisher: Plumbline Publishing Group
Published: 2012-11-19T21:00:00+00:00

Your Project’s Budget

Your project’s budget will show how much your project will cost and during your project you will need to monitor how you are spending project funds. Budgets are most commonly tracked in dollars (or your country’s unit of currency), but there may be times when you also establish a budget for other resource units. You might have been given limited free access to a resource which needs to be managed. For example, a benefactor might indicate you can use her company’s printing equipment for ten hours on your project. In that case you would be advised to create a budget which can be tracked for each time the printing equipment is used. During the planning phase it is important to gather information about the budget and any tolerances you have.

In addition to showing the total resources your project will require, effective budgets also show when expenses will be incurred. A common practice is to show your budget in the same time-frame as your project schedule. If your schedule shows work weekly, then your budget should be weekly too.

Budgets may be set before a project starts or might evolve as you understand more about what needs to happen. Similar to how you estimate duration and effort on your project, budgets are often set the same way. A key stakeholder might indicate that you have a budget of $1,200 for the project before any planning has actually started. As you begin to build your project schedule you may then start to sum up the resource needs to determine the total budget required for the project.

Here is a real-life example of how the top-down and bottom-up budget process can take place. A local church group is planning to hold a conference for regional church leaders. A budget was given to the project manager of $2,500. During the early planning phases the project manager met with the church board and learned that they could authorize as much as $2,700 but nothing more. So during the planning process, the project manager (as you’ll learn in the How-to) went about planning the project and creating a budget. While the initial budget came to $2,600 he re-planned some items and asked for some concessions on a few “nice to haves” and was able to get it back to $2,500. The extra $200 was respected as an emergency fund in case something unplanned happened.

Your project budget will usually consist of these main categories:

1. Expenses for materials, equipment, travel and rental/lease spaces

2. Expenses for people’s time such as hired project members, consults, guests, etc.

When creating the project’s budget consider all fixed costs such as rental/lease fees, material purchase and effort x cost (such as hours x hourly rate). If you create a work breakdown structure which includes the activities for each project deliverable you can list them along with a sum of all expenses or you can create a budget like the example below which shows expenses related to key activities. (This example was created using MS Excel).

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.