Here are some practical pointers for project managers on how to ensure any project’s success….
Back up all your decisions
You need to be able to justify why you have included all the items in your budget. This means explaining what your business objectives are, and how each expenditure item will help you to realise them. Your budget may be better received if you can show that your expenditure is in line with your organisation’s overall strategic objectives. Be prepared to also define the impact that reducing your budget will have. It’s important to stress the need to have appropriate budget to help you to achieve your key objectives.
Do a cost-benefit analysis
For key budget items, if you haven’t chosen the cheapest options available, it’s important to explain clearly the thinking behind your decision. A cost-benefit analysis can be a useful way of demonstrating the business sense of your proposal.
It’s important to produce a true budget, rather than manipulate the figures to try to get what you want. You might get your budget approved first time, but if you have deliberately overestimated your costs, you may well have your budget reduced next time. If you need £1,000 for a training course, don’t try to increase your estimate to £1,500 in the hope of gaining some spare cash to use for other things! In order to inspire trust in your financial capabilities, honesty is always the best policy.
Be as accurate as you can
Ensure the figures you have produced are accurate and you haven’t made any mathematical errors or unreasonable assumptions in your calculations. If you have, and this is detected, it will just raise doubts as to the accuracy and viability of your overall budget.
Demonstrate your budget management skills
If you’re known for keeping tight control of your budget – regularly monitoring and taking any action on variances – you’ll be known for your good financial management skills. When it comes to agreeing your next budget, you’re more likely to get additional money if your senior colleagues know that you’ll make good use of your funds.
Be prepared to compromise
When negotiating your budget, it’s unlikely that all your requests will be met in full by the person approving it. It is a good idea to work out beforehand which aspects of your budget are most important to you, and which you are more willing to compromise on. That way, when you enter into the negotiation, you will feel prepared, less likely to panic, and will have some room for manoeuvre.