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Monday, May 02, 2016

How to Expedite your Project Budget Estimates

By Shala Graham

How to Expedite your Project Budget Estimates

Whenever I’m working on a proposal for a design project, the biggest time suck was always figuring out the budget. Most of a proposal can leverage a boilerplate for things like about the company, qualifications, and even the executive summary, but if you are delivering custom solutions, the budget can be a beast. It seemed to take several hours tracking requirements, determining the approach, and crunching numbers to create an accurate budget. Then one glorious day, our project manager said enough is enough and developed a budget calculator for project estimating!

Our budget calculator was created using a Google Sheet so that it would be easy to share and edit amongst team members, but you can surely use your spreadsheet software of choice. For our projects, we budget by phases and need to see a low, mid and high estimate. For complex campaigns, we may have multiple sheets of the calculator with a master sheet that adds up the costs from each individual calculator.

For each task in a phase, include any scope notes, such as # of concepts, pages, rounds of revisions, etc, that will help you understand what you budget is based on. You can also use this language in your actual proposal. One task that we include in each phase has a project management. We often calculate a project management fee at 10-20% for each phase to account for emailing, calls, internal conversations, etc. It also serves as a budget buffer. You can adjust the formula for your percentage of choice, if you choose to have this function.

Since we typical propose fixed project costs, the low and high estimate is reflective of the same specs so we can find a middle of the road number. To the right of the main calculator, we have a “middle of the road budget” section that calculates the mid-range cost for each phase, and an column for you to add a clean, round number to use in the actual proposal. It's best to use round numbers in a proposal so clients don't have fussy numbers that look questionable. You can go higher or lower as you like, and I typically need to massage these numbers so that the total amount is a nice, clean number. And in other cases, we may use the low and high estimate to show a lean option versus a bells and whistles options (be sure to round those numbers, too). This is handy when clients ask for low and high budget options to choose from.

Here is a link to the calculator template in Google Sheets. If you don’t use Google apps, just go to File > Download as, then select your file format of choice, such as a Microsoft Excel or CSV file. All you need to do is customize your hourly rate, then add your tasks. Feel free to add more task rows and edit the formulas accordingly.

Want more tips and insights into how you can run your business better? Schedule a 15-minute Golden Key call to talk with a business coach about unlocking more doors in your business.



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