Part 4: Project budget management
Managing the project budget is one of the toughest parts of project management. tons is riding on the project budget, not least of all the happiness of your client and your bottom line. Keeping both those considerations in mind, successfully managing a project budget means staying on top of the many moving parts.
In this section, we guide you thru how you'll keep track of your budget throughout a project’s life, from the sales stage all the thanks to completion. Use this section as a guide to keeping your budget healthy and your clients happy throughout a project.
The importance of a budget in web design project management
The budget may be a central component of successfully managing a project, not only because it’s all about money—budgets also help keep the remainder of the project in line. They determine the time and energy which will be spent on a project and make sure that all stakeholders understand the scope of the work ahead.
There are nightmare scenarios related to poor budget management or incorrect estimations—losing bids, being underpaid, and seriously unhappy clients among them. But when done right, the budget may be a tool to create strong, trusting relationships together with your clients.
Throughout the project management process, keeping stakeholders within the loop on any budget developments avoids unpleasant surprises at the top of the project, and ensures everyone understands the project process. you would possibly also want to think about including a neighborhood in your contract about potential budget expansion consideration and what which may appear as if . for instance, if more hours are required, how will the client be charged? Is there a limit to additional fees?
How to prepare a budget in project management
One thing about budget management is certain: the sooner you begin, the higher. Through the sales and estimating phases of a project, you ought to be nurturing transparent and honest conversations together with your client about money.
Here are the steps we recommend that you simply follow.
1. Understand the scope of the project
You should start brooding about estimates as soon as you begin speaking with a possible client, says Mike Samimi, VP of Customer Success at Shopify Partner Syatt, a rapidly growing eCommerce agency.
“When we lecture a replacement prospect, what we'd like to form sure of is that the proper people have involved therein conversation during the sales process,” Mike says. “We got to confirm we've people that understand Shopify as a platform rather well at a functional level, and who understand the technical aspects of Shopify, to be ready to provide what the client might need and for us to assess what the budget could be for that project.”
Key point: confirm to spot your client’s constraints
If your client knows what goal they need to accomplish with their project, you'll help them identify their biggest constraints. Typically, these are going to be time and budget. Identifying the impact of those constraints early will assist you to build a realistic budget.
2. Build your estimate
Once you’ve worked together with your client to spot the scope of their project, it’s time to start out building your estimate.
Project estimates are often as simple or as complex as your business requires.
Typically though, regardless of how complicated the estimate is, it'll contain a minimum of the subsequent information:
- ·Description: an in-depth breakdown of every task that's required to finish the project. this will even be divided into project phases.
- ·Time: An estimate of what percentage hours it'll fancy complete each task or phase.
- ·Rate: The billing rate of the team members performing each task or project phase.
- ·Additional costs: Additional charges (for example, stock photography).
- ·Estimated total: the ultimate total estimated price of the project.
a. Use historical evidence
If you’ve worked on projects before, you likely have older budgets you'll regard to guide your current estimate. check out what you quoted also as any lessons learned from previous estimates so that you don’t repeat your past mistakes.
b. provides a holistic estimate
Trudy MacNabb, a co-founder of Shopify Partner Up at Five, a design and development digital studio, highlights the importance of watching all the work related to a project. this is often what we mean once we say a holistic view of the project.
c. Get the knowledge you would like
Considering a holistic view of your project also will assist you to identify early what you would like from your clients to try to do the work well.
Ask yourself what information you need. this might include:
- ·Brand guidelines
- ·Assets
- ·Emergency contacts
- ·Passwords and/or access tokens
- ·Any other special considerations
Finally, remember that nothing is for certain. Add flexibility to allow those unpleasant discoveries and unfortunate circumstances that come up in any project. This protects both you and therefore the client and allows you to rest easy knowing that you’ve allocated resources to affect anything unexpected.
3. Manage the budget
Once your estimate is signed, it becomes your project budget. You now have the responsibility of ensuring that your team and your clients are kept updated on any changes. Why? Because clear, open communication about the project budget is that the key to keeping you and your clients aligned.
Here are a couple of high-level best practices for managing budgets throughout a project.
a. Host regular check-ins
Budget (and therefore, scope) conversations shouldn’t only come when there’s bad news to share. Instead, regular budget check-ins should be something your clients can believe.
“We have constant check-ins with our clients,” says Nicholas of Spently. “We send them screenshots, we do screen shares, we’re constantly posing for feedback, and making them a part of the method. This way, we don’t get to the top of the project and show them a site that's not what they wanted or what they expected… because they’ve been a part of the method the entire way.”
b. Be transparent
Mike of Syatt notes that additionally to regular check-ins, it’s important to speak clearly, even when it’s but positive.
“[Communication] comes with excellent news and bad news, and that we got to share that as soon as possible,” Mike says. “We got to be the experts that we are in eCommerce, and be pragmatic with our clients. Communication and pragmatic problem solving together the team will help us manage that project and scope.”
Count on unexpected things happening in any project. With open and honest communication, you'll work together with your client to tackle any obstacle.
4. Adjust the project budget as necessary
Sometimes, despite your best efforts, changes to the budget and scope of a project are unavoidable. Knowing the way to effectively adjust a budget will assist you to navigate these problems once they arise. Below are some tips for handling different situations that impact project scope and your budget.
a. When resources change
Resources often change throughout a project. this suggests you’ll get to re-examine the project scope or timeline. But, there are steps you'll take throughout a project to limit this from happening.
One is to review the resources that the project is consuming on a weekly cadence. what percentage of people are performing on it? Is everyone’s nonce used wisely? is that the overall budget still on track? These weekly check-ins will assist you to understand how your resources are being allocated. you'll schedule these check-ins as weekly reminders via your project management software also.
These check-ins are key because ensuring that your team’s resources are being consumed wisely and efficiently can help make further resources available down the road. Reviewing and forecasting are necessary to be prepared for inevitable shifts in project priorities.
b. When the client requests a replacement feature
Clients can, and will, request new features within the middle of a project. Trudy from Up at Five suggests watching how the requested change affects all areas of the project, to raised communicate the impact to clients.
“When a replacement feature comes therein the client requests, we cost out the number of sprints it’ll take,” she explains. “That will allow the client to also know the timeline and budget it'll fancy complete that feature.”
c. When your estimate was too high
At the top of a project, it’s always knowing to reflect on your estimate versus the particular outcome. Not only will this assist you to identify pitfalls and mistakes to form estimating your next project easier, but it'll also assist you to understand if you’re overestimating project costs.
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