Step by step drawing up a 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.

1. Make an inventory of the types of costs

Decide what the main cost categories are and list all the expected cost items under them. In the cost categories, only state the most important items individually. Include indirect costs in your budget as well. If you don’t have to pay these, state that the location or office costs, for example, will be borne by a third party. The budget on the basis of which you will be trying to raise funds is always a rough one.

If you are drawing up the budget for a subsidy application, then first find out whether you need to use a standard form. These sometimes include standard amounts or percentages. You could also use them as checklists.

2. 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.

3. 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.

4. 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.

5. 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.

6. 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.


  • Sometimes you can find standard amounts or rates in a standard form for a grant from a subsidy provider.
  • See if you can find budgets for similar projects.