Think of a budget proposal as a budget project but with a different goal: to convince an evaluator that your idea is workable. This document explains your project scope and timeline and the material, labor, and outsourcing costs involved in producing the deliverables. Generally, it is a formal presentation to management when looking for funding for your project. This article will look into how to use a Budget Proposal Template to prepare this document.
What Is a Budget Proposal?
A budget proposal is a formal document that outlines the projected step-by-step phases of a project and their costs, which are subject to changes during the course of the project. It is designed to give the evaluator an idea of how much it will cost to execute a project, helping them decide whether you can be trusted with funding.
What Is a Budget Proposal Template?
A budget proposal template is a format planning document that allows you to fill in the scope, phases, and costs of an upcoming project. It contains all the key elements of a proposal, including direct cost, administration costs, project goal, and anticipated revenue. If you regularly prepare budget proposals, you can prepare a uniform template with your company’s letterhead that you can reuse.
Essential Elements of a Budget Proposal Template
A working budget proposal must contain a detailed project sales pitch that is thoroughly researched and backed with facts. It should help the evaluator understand why you are doing the project, how much it will cost, and how much revenue they can expect. To do this, it should include the following elements:
- Project Goal – The proposal should highlight the objectives of the project being discussed in no more than two sentences at the beginning of the document.
- Direct Cost – It should also describe the costs of the production, distribution, and marketing of the deliverable. In a corporate budget, this information falls under production costs.
- Administration Costs – Most sponsorships don’t generally pay for facilities and administrative costs. As such, your budget proposal should contain a separate section to cover these costs so you can look for a grant.
- Anticipated Revenue – These are the projected benefits from revenue or sales that you can expect from the project.
Budget Proposal Templates and Examples
How to Write a Budget Proposal
Contrary to popular belief, a budget proposal is very easy to prepare, especially if you have a working Budget Proposal Template. The following guide works for both simple and complex budgets and will help you prepare a proposal your evaluator can’t refuse:
Step 1: Create a Gantt Chart
Gantt charts give you a clear overview of the scope, steps, and team involved in a project. It is an excellent first step in creating a budget proposal because it will tell you what steps will be taken and when. As a bonus, it will also tell the evaluator that you have a strong grasp of the work at hand.
Step 2: Provide a Person-Days Estimate
Before estimating the project costs, you must review the amount of work that goes into every activity in your Gantt chart and determine who will do them. This does not mean that you write down the names of your team members, but rather the type of professional, e.g., researcher, marketer, engineer, developer, etc. Assign each person their pace of work and hourly rate.
Step 3: Calculate the Labor Costs
Now that you have an estimated person-hours or days for every activity in your project, you should determine the total labor costs. Doing this requires that you multiply the hourly or daily rate for every person by the number of hours of days they will be working.
Step 4: Factor in Travel and Subcontractor Costs
Next, calculate the travel costs by multiplying the cost of return tickets by the number of travelers. It is important that you overestimate the totals to account for possible changes. Now, factor in a daily allowance for the travelers. You can use official OECD staff estimates. Finally, indicate all the subcontractors you will hire, the tasks they will perform, and the related costs.
Step 5: Find the Total
Lastly, calculate the total estimated costs to come up with a figure for your budget proposal. You can now edit and present the document to your evaluator.
Budget Proposal Writing Tips
Consider the following tips when preparing your project proposal:
- Put forth a question you wish to answer (or problem you wish to solve) through your project and explain how the project will accomplish this.
- Explain in clear terms the course of action you plan to take (i.e., project phases) to answer your question or solve the problem.
- Research your project and cite all your sources using an appropriate format.
- Write simply and in clear language, avoiding technical jargon as much as you can.
- Try to be persuasive, enthusiastic, and convincing without losing the core of your proposal.
- Help the evaluator understand the importance of your project, its role to your target audience or market, and how it connects to the company’s mission.
- Convince the reader that your project is appropriate for their funding by highlighting your qualifications and explaining how you will meet their expectations.
- Provide any additional information that explains the proposed budget.
Developing the Budget
Here are more tips for when you calculate the individual and total costs to develop a budget:
- Be conservative in how you distribute resources. Your evaluator will appreciate the instances when you economize without harming the project goal.
- Be consistent so that your project proposal and budget complement each other and don’t contain conflicting information. Contradictions could be read as a red sign for the evaluator.
- Research your project extensively, and only select item lines, subcontractors, and suppliers that are tried and tested and will deliver as agreed upon and on time.
- Consider worker safety and health when preparing your budget.
A well-researched budget will serve as a guide for your project, helping you use resources wisely and reach your goal. This is especially true when the funding is limited, and you must account for future sales and revenue to generate a profit. Before beginning a project, you can prepare a budget proposal by filling out a Budget Proposal Template with the details and through the guide provided in this article. You will come up with a proposal your evaluator will have no trouble passing.