Developing a budget

One of the most important parts of developing a project idea is working out the project budget. Getting the costs and the income wrong can cause problems later on, particularly if you under estimate the costs and over estimate the income!

For a small project developing the budget will probably be relatively easy.  For a larger project developing a budget can be a bit more complicated.  Whatever the scale of the project there are a few things that will be useful to do:

  1. Make sure you include ALL COSTS so that you can recover the real cost of the project rather than you having to subsidise the activity from other places.  This includes things like office rent, use of a vehicle, the cost of the time spent by a manager overseeing a project, contributing to the cost of support staff.  More information is available in the section of Real Cost Recovery.

  2. Separate costs into capital and revenue.

  3. Don't guess at costs - make sure you do the research necessary to be as accurate as possible.

Include in the budget things that you may have been offered as help-in-kind (this includes services as well as goods). These should be put in both the expenditure and the income side of the budget.  This should also include the time of volunteers.  A reasonable cost / income to apply to volunteers is £50 per day.  These can be included as matched funding where this is needed.

  1. Take account of any VAT issues

Record all your assumptions so if you are asked questions about the figures you know how you have arrived at them.

You can download a programme called "Budget Yourself" that you may find a useful way of working through a budget.