Step-by-step plan project budget
You draw up budgets for yourself, your sponsors and clients. On the basis of the budget you gain insight into the financial risks and the ratio between the costs and the expected results.
On this page
1. Determine for whom you are making the budget
You make a budget to gain insight in the financial side of your plans so that you can assess their feasibility. Also financiers or other partners often want to see a budget. If you are making the budget for a subsidy application, first check whether you need to use a standard form. Sometimes standard amounts or percentages are included. You can also use such a standard form as a checklist.
At the bottom of this page in the Downloads tab you will find two different examples; a simple and comprehensive budget.
Do you record the amounts including or excluding VAT?
This depends on the purpose of your budget and the administration of your company, client or fund. Inquire about the requirements in advance, so that you are not faced with unpleasant surprises afterwards.
Example: If you, or the organisation for which you are preparing the budget, are liable for VAT, you must prepare a budget excluding VAT. In this case, you can reclaim the VAT on costs incurred and pay the VAT you collect. Then VAT does not actually matter. If you are not liable for VAT, or if the organization is exempt from VAT, for example, you calculate amounts including VAT, because nothing can then be settled. If you receive a budget from a school, ask carefully whether you should include or exclude VAT.
2. Make an inventory of the types of costs
Think about what costs you will incur. Group these costs together, such as 'Staff' or 'Decor'. These are also referred to as cost categories. Only list the most important parts within these categories. So not every screw or costume needs to be mentioned separately.
Also include the 'indirect costs' in your budget. These are costs that you incur, but which cannot be directly attributed to the project. Such as using an office or machine. A distribution key is often required. If you do not pay any money for this, please state that, for example, location or office costs will be borne by a third party.
3. Estimate the costs
Estimate the costs as realistically as possible. For example, make use of negotiated wages, called tenders, target prices or historical figures. An amount based on an offer by a supplier is relatively ‘hard’. Target prices are less so, and empirical data even less. Memorandum items indicate that no statement of the cost is possible yet. These, of course, are risky items, so include an item ‘Contingencies’ in your budget categories.
Two particular types of costs are:
- Employees: You may be commissioning or employing people in your project. If you employ people, you have to pay social security contributions on top of the gross wages. Get all the information you can about these costs. Also, make sure that you employ people for a long enough time… including the rehearsal period, for example.
- Capital equipment: Few subsidy providers provide money for purchasing capital or durable equipment. If there is no subsidy available to buy this equipment, you can still ask for (a percentage of) the hire price, as long as you indicate to the subsidy provider that this is part of the purchase price.
4. Make an inventory of what types of revenue you expect
Write down all the expected items of revenue. Add up the subsidies you have applied for, your revenue from sales, form the public, etcetera. The total of revenues forms the financing scheme of your budget.
5. Estimate the income
Be careful when estimating revenues and make sure that you can argue the amounts. A good plan does not guarantee good revenues from sales and merchandising.
6. Justify your costs and expected revenues
Do you use the budget for a subsidy provider or do you want to look for an investor? Combine the budget with a motivation of your project or grant. Account for all the costs and revenues. You can do this in the budget. You can also submit a separate document in which you explain your choices. This allows the subsidy provider to better understand your budget.
7. Make a task budget
The promises made by the sponsors, along with the revenue you expect, determine how much money is available for the project. This amount has now become a task budget. You need to recalculate the costs of each item again on the basis of this new budget. Dare to stop with a project if your budget is not sufficient.
During the production and implementation, you need to monitor the budget carefully. If you use the budget to monitor, you can always tell if there are any items you slide with and what the ultimate outcome of your project will be.