How to Do More With Less: Seven Tactics for Handling a Small Project Budget
According to a PMI survey,
57 percent
of teams finished projects within their initial budget in the last 12 months. While this is
the majority, it is still striking that 43 percent of those surveyed could not adhere to their
project budgets. This problem is a significant one. Going over project budgets not only halts
project timelines but can also be an indicator of project failure. However, what happens when
the budget is a bit smaller than what you need?
Today, many companies are having to manage leaner teams and tighter budget constraints. This
situation means that it is highly likely that you may be having to manage your teams with less
project funding.
Handling a project budget effectively is an art, and it can be a challenging one to
master—especially if the budget is tight. Fortunately, there are ways to overcome this. Below,
we've included some tips that can help you squeeze the absolute most out of your project budgets.
Develop a Project Plan
Before you start your actual work on your project, you should take the budget and begin to
prepare a project plan that coincides with it. This should include the project scope, the
labor you will need, timelines, necessary tools, and all the other essential components of
the project.
Working on this plan will allow you to go step-by-step to see how the budget matches your
project strategy, and if working with the budget you’ve been given is even feasible. Taking
this step also ensures that you, your team, and company leadership, are on the same page.
Look Back at Historical Project Information
Did anything go wrong in past projects? Did you go over a project budget last time? Go back
and start to look at the documentation that lists where the errors occurred. Seeing these
examples allows you to prepare to deal with some of the issues that can come up to avoid them.
If you are working with a tighter project budget, the room for error is definitely slimmer.
Therefore, do what you can to prepare for any potential hiccups that happened in the past.
Also, don't hesitate to speak with your team members about problems they may have noticed.
They can offer some insight into your creation of prevention strategies.
Understand the Client's Scope
Make sure that you understand the client's expectations and specifications ahead of time.
Project miscommunications can quickly derail a project and tank a budget. Therefore, it is
critical that you have a clear idea of what your clients are looking for. You can help
these efforts by asking the right questions and meeting to address their project needs.
According to Workamajig,
poor communication is one of the top five reasons for project failure (29 percent). As a
result, it is crucial to ensure that the initial lines of communication are open so you can
understand what their project needs are and communicate what your team needs from them. This
measure can prevent costly errors so that you can have a better chance to stick to your
project budget.
Invest in a Project Management Software Tool
Sixty-six percent
of companies using project management software completed projects with their original budget,
compared to 47 percent of companies who don't use these tools. This step is a pivotal one you
should take to stay within a small budget.
Many project management tools include templates and additional resources that help teams to
be efficient and manage their budgets in real-time. These tools can also help you more
accurately track your budgets and determine if you have enough resources to complete your
projects feasibly.
See Where You Can Cut
This step may not be an option, but it's helpful to have a frugal mindset in place to see
where you can maximize your resources. For example, do you need the paid version of all the
tools you use? There may be some free options that will suffice that you can use instead.
Additionally, don't forget to think about how you manage your team and their time. Each time
you pull a team member into a meeting, the less time they will have to bring ROI to your projects.
So, take a close look into where you could be wasting time and resources while increasing your
expenses. The more you save, the easier it is to stick to the budget.
Be Ready for Scope Changes
Again, you can do everything in your power to avoid a change in scope. However, your clients
will likely want to alter something. Data by PMI found that
over half of projects
experience scope creep. This event can bring a huge drain to your budget. An excellent way to
avoid this is to look at past project information regarding your clients to see where they
might have asked for changes in the past.
You can then set aside some funds to manage these potential changes, so you aren't caught off
guard if they ask for them. Additionally, make sure that you set boundaries regarding scope
changes. Again, the last thing you want is to have to waste time and money starting from scratch
because of any alterations requested by clients. Therefore, make sure that you let them know
that you may need to renegotiate pricing or timelines if necessary.
Always Do a Temperature Check
Always be proactive when it comes to monitoring budgets. It's critical that you set up benchmarks
to monitor project progress to ensure that everything is staying on budget. This action allows
you to halt any budget overrun if you see it happening. A reliable project management software
tool will come in handy here.
It will give you an overview of where things are and make it much easier to track your budget
and its relation to your project as a whole. Technology can't solve every problem, but it can
be a significant resource for keeping track of your project's moving parts.
A Small Budget Doesn't Have to be an Obstacle
Yes, a small budget can be a challenging thing to overcome. However, it doesn't have to derail
your project. It can be something that motivates you and your team to create better efficiency
in your projects and be even more intentional about preventing scope creep.
It isn't ideal, but the tips above can help you to overcome budget-related limitations. Again,
use historical data, be sure to communicate with your clients to understand their needs, and
always make a point to track your spending so you can catch any potential budget overrun.
Before you know it, you and your team will be meeting your project goals and staying within
budget as you also complete your milestones.
Sources:
Project Management Statistics: 45 Stats You Can't Ignore,
https://www.workamajig.com/blog/project-management-statistics
The Pulse of the Profession, 2018,
https://www.pmi.org/learning/thought-leadership/pulse/pulse-of-the-profession-2018
The State of Project Management in 2020 [42 Statistics],
https://saaslist.com/blog/project-management-statistics/