If you don’t have the funds, you’re not going to complete the project successfully. That’s why planning out your project budget is so important: it’s the lifeblood of the project.
A project budget is the total projected costs needed to complete a project over a defined period of time. It’s used to estimate what the costs of the project will be for every phase of the project. The project budget will include such things as labor costs, material procurement costs and operating costs. But it’s not a static document. Your project budget will be reviewed and revived throughout the project.
Why You Need a Project Budget?
The obvious answer is that projects cost money. But it’s more nuanced than that. For example, the budget is the engine that drives your project’s funding. It communicates to stakeholders how much money is needed and when it’s needed. But it’s not only a means to get things that your project requires. Yes, you need to pay teams, buy or rent equipment and materials, but that’s only half the story. The other part of the importance of a project budget is that it’s an instrument to control project costs. The budget is your plan, which acts as a baseline to measure your performance as you collect the actual costs once the project has been started. To meet all the financial needs of your project, a project budget must be created thoroughly, not missing any aspect that requires funding.