Ballooned project budgets exist in every realm and they are usually the result of rather common blunders. No elaborate analyses are necessary to determine what usually blows budgets out of the water in many projects. It doesn’t matter what industry or what type of work is being done, the budgeting mistakes are can usually be called problems from lack of common sense. Don’t put all your eggs in one basket and don’t count your chickens before they hatch are what the old clichés say. Guess what? They still apply to the modern business world.
Determine Your Project Goals
What are your goals for this project? If you can’t come up with an answer right away, you’re project could easily become a train wreck. If you don’t know what you really desire for the project, or if you do but are not sure you know the best way, you may need to plan or discuss it some more. Just stick to concrete planning that focuses on actual costs and actual situations.
Suffering from Over Budget Projects
Eighty-five percent of projects go over budget. Yes, eighty-five percent. Research on costs and potential cost disruptions is essential. Speak to the experts in your group. If you don’t know everything that could go wrong on, say, a building construction project, talk to a construction manager who is on your team, someone who is currently in the construction business. Don’t expect an accountant who left the construction site ten years ago to be able to project these potential pitfalls. That person may have been a great construction manager once upon a time, but is now out of touch with the bricks and mortar.
Unexpected events will inevitably happen without you planning for them. That’s why they are called unexpected. You can’t predict all of them, but if you plan a contingency fund for them and take a cautious approach, you can minimize the risk.
Keep with your schedule and put in extra time in the present to stay on schedule. And stick to the original plan. That’s how you avoid the specter of scope creep. Otherwise, as the project drags on and as you make more and more little changes, the scope of the project gets expanded and distorted, and raises risks of other issues as well.
Avoid cost mistakes and always watch the budget through the whole process. Costs change and must be kept in check. If the price of an item rises midway through the project, you need to act accordingly, or you’re sure to have budget overruns.