A budget proposal summarizes the estimated costs for an upcoming project in order to secure funding from project stakeholders. You can also use budget proposals on the company or campaign level. Learn how to create a detailed budget proposal using our free template.
When you have an idea for a new project, you’ll need the right people on board to bring it to life. While your team members can create the deliverables, projects often can’t move forward without funding—which requires approval.
To get your budget approved, you need to present your budget proposal to others in the best light. This means researching your project idea and planning ahead. Keep in mind that stakeholders will look closely at your projected expenses because the benefits of the project must outweigh the costs.
In this article, we’ll cover how to create a detailed budget proposal. A strong project budget proposal can be the deciding factor in whether your project initiative becomes a reality or needs to go back to the drawing board. Then, use our free template to get started.
A budget proposal summarizes the estimated costs for an upcoming project in order to secure funding from project stakeholders. Your budget proposal breaks down the cost elements associated with your project. This shows stakeholders the benefits and/or drawbacks of getting involved.
The costs you include in your budget proposal will likely fall into four categories:
In this article, we cover how to draft a budget proposal for a project. However, you can also use budget proposals at the company or campaign level.
A budget proposal breaks down the expenses you’ll incur during project execution. A clear budget proposal can help your team and others involved in the following ways:
While the purpose of a budget proposal is to receive funding or approval, you can also use your budget proposal as a budget plan for when the project becomes reality.
Your budget proposal template is informative for stakeholders who may fund the project, but it’s also helpful for your internal team. When you get to the project planning stage, you can use your budget proposal for things like team utilization rate and resource allocation.
To introduce your project budget proposal, start with an overview of your project objectives. By explaining what your project is about and the goals you hope to achieve, you can provide context for your budget proposal. Without context, your potential stakeholders may have trouble understanding what—and why—you plan to spend in certain areas.
You may include a budget proposal within a larger project plan, but budget proposals can also stand alone. If a stakeholder solely has a financial stake in your project, then they may not want to read about detailed project timelines and workflows. However, they’ll need to understand the high-level purpose of the project to feel comfortable approving your project budget.
After you briefly explain your project objectives, include a summary of cost elements. Your cost elements may include direct and indirect costs, equipment and materials, travel costs, and miscellaneous expenses.
This section is essentially a table of contents and lists the various types of costs you’ll break down. Every budget proposal should include a list of cost elements so stakeholders can preview the information they’re about to read.
Depending on the project type and industry you’re in, your cost elements can sway from the traditional categories. For example, SaaS companies may not need much in the way of physical equipment or materials, but they often spend money on things like online services, subscriptions, freelancers, and software. Alternatively, manufacturing companies often invest heavily in machinery and other long-term equipment. Summarize your cost elements based on your largest expense categories.
Once you’ve listed your cost elements at the category level, it’s time to break down your costs one by one. This is your chance to dig deeper into the details and give your stakeholder a clear picture of where you plan to spend it, and why these expenses are necessary.
For both direct and indirect costs, list the following details when breaking down your costs:
Equipment, travel, and miscellaneous expenses aren’t that different from your direct and indirect costs. But because these are more likely to be physical items, you can add areas for quantity and unit price versus hours. Explain each cost within your cost breakdown and provide singular and total costs for each item. This should give stakeholders a clear idea of your project budget.
This section is a quick and simple look at all your expenses. Stakeholders need an itemized list of what you plan to spend money on, but they’ll also want a section of your budget proposal that clarifies total costs.
Some may also want to scan through the document and pull these numbers out quickly. This section makes your total budget clear for each cost element, as well as the total budget in its entirety.
Once you’re confident in the budget items you’ve listed, it’s time to submit your budget proposal for approval. Add a signature area to the bottom of your document so stakeholders can sign off on the document once they’ve approved it.
In the budget proposal sample below, you’ll see how two team members organize expected project costs for an upcoming social media campaign.
This budget proposal lists direct and indirect costs associated with the campaign, including things like team wages and utilities.
This is only a preview of what their budget proposal may look like in its entirety. To create your own budget proposal, download a free template below.
A budget proposal is a great way to plan for an upcoming project. But to go further, you’ll need the right tools at your disposal. With work management software, you can create financial goals for projects and larger initiatives, and track them from initiation to completion.
As your projects expand and change, you can adjust your budget and share your data with others. Whether you’re managing expenses or running meetings, you can do it all with Asana.