Chapter 7 – Scheduling Resources and Budgets

7.10. Creating a Project Budget

A simple budget can be created in 5 steps:

  1. Break the project into small tasks and milestones:  Create a task list.  This will help the team understand all the details of what needs to be accomplished.
  2. Estimate each task and milestone:  Research comparable costs and give each task/milestone an estimation.  This is a good time to identify all the resources (people, materials, equipment) work performed, and work out the costs.
  3. Add the estimates all together:  Calculate the total costs by either adding them up.  If you use an excel sheet, you can sum to get the total.
  4. Add in any contingencies, taxes, other costs:  This can include overhead costs, reserve funds, governmental taxes.
  5. Seek approval:  Speak to the person of the authority, review the project budget in detail, and get approval with a signature.

You can use a checklist to ensure you have covered all the budget expenses before seeking approval:

    1. Can I define the project and its end goal?
    2. Are there any ground rules, constraints, and assumptions I should consider?
    3. Do I have sources of data (Task List, WBS, Cost Estimates, Schedule) to rely on?
    4. Is the estimating methodology in use acceptable?
    5. Do I know who is going to work on the project?
    6. Do I have a list of resources and their rates to complete the project?
    7. Can I compare my estimate against the best practices industry standard?
    8. Do I have contingency reserves to account for risk?
    9. Who are the key project team members to help me in the estimating/budgeting process?
    10. Am I on the same page with Project Stakeholders?
    11. Can I compare the budget with original estimates and reconcile differences?

(Viter, 2021)

Watch the video: How to Create  a Project Budget by Project Manager [3:05] below. Transcript available on YouTube.




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Strategic Project Management Copyright © 2022 by Debra Patterson is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.

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