Every good project starts with an excellent budget proposal. With this document, you prove stakeholders and investors that your organization is responsible and serious about performing tasks and calculations. The right way of presenting a file of this nature is using a Budget Proposal Template. This valuable guide will help you to organize costs, expenses, anticipated revenue, and other elements.

A budget proposal is a document that summarizes all the possible costs involved in an upcoming project. The main goal of budget proposals is to present the project's overall price from the starting point to the final delivery. This way, stakeholders and investors may decide if they will invest in the project.

When you present a proposed budget, you include the costs of all the activities and tasks you and your team will perform during the development phase. In general, we can divide the project costs into four categories:

• Direct Costs. These correspond to expenses that are directly related to the project in question. It means actual costs during the current project. Some of these are labor costs, costs of specific activities, special professionals hired for the project, etcetera. 

• Indirect Costs. These are the general costs that your company incurs to operate. In other words, these costs are not directly related to the project idea. Indirect costs are also items that help you to run the particular project, such as salaries, expenses, services, insurance, etcetera.

• Equipment and materials. Some companies consider equipment and materials as direct costs when building the project budget. Still, creating a separate section for these physical items is better. Here you should include all material items needed to complete tasks.

• Travel and other expenses. These are extraordinary costs that your organization may incur from time to time. It includes travel, hotel costs, taxes, training, etc.

Below we resume four primary reasons why your business should use a budget proposal before starting to work on a project.

It Helps You to Create Financial Transparency

One of the secrets to the financial success of any project is the transparency. You, investors, and all stakeholders need to know exactly where every penny of money goes. This way, creating a detailed budget proposal is crucial to know exactly all the expenses and, ergo, the expected profits.

It Showcases Cost Efficiency

A budget proposal, as a cost summary, is an excellent way of showcasing to stakeholders and external organizations the value of the project and the relevance of your company. Besides, presenting your costs correctly will let stakeholders and investors know how efficient your organization is. Remember that the less money your company needs to provide a similar service, the happier the partners will be to work with you.

It Shows Project Impact

Presenting the total cost of a project allows you to calculate and estimate the project's impact on the industry. Every new project generates an influence in certain areas, and it may bring new aspects to improve people's lives.

The bigger a budget proposal is, the more relevant its impact in the industry. Although, often, better results achieved with a smaller budget speak highly of your company.  

It Allows You to Forecast Profits

Knowing exactly how much your organization will spend during the project development will let you estimate the net earnings. Besides, if your actual expenses are much lower than your income, your company is highly productive, and project managers, planners, and employees are doing their work well.

Building a professional proposal is easy if you know precisely what elements to incorporate in the document. Generally, these templates are spreadsheet files just for a specific project, but you can create a file you can use for several purposes.  

Define Your Project Objectives

By providing context for the costs associated with the project, you ensure that potential stakeholders understand the purpose behind your actions and the value it brings to the overall project.

A good idea is to include a project plan defining starting and ending dates, estimated total costs, and explaining general goals you want to achieve. A timeline can also be handy, especially in construction projects, with payment deadlines for investors.

Still, many stakeholders have only a monetary perspective on the phenomenon, so they do not need so many details.

Organize the Costs for Categories

Previously we mentioned four categories into which you can divide the general costs of the project. When doing that, you must consider all the expenses of the entire company during the process and all the possible expenses that can appear on the way.

So, divide the document into direct costs, indirect costs, equipment and materials, and other expenses.

It should result in a formal document as a table of contents where you can easily track any task or activity. Remember that the costs you include in any section will be further broken down, so try to be the most accurate possible.  

Anyway, the categories you will use will depend on the industry your organization is in. For example, if you have a digital startup, you won't need to create a "materials" category but maybe another section, such as subscription costs, referral costs, etc.  

Break Down Categories and Define Costs

After categorizing your costs into specific tasks and activities, break them down individually to better understand why each task incurs its respective cost. The cost breakdown describes in detail how every penny is allocated and where it is being utilized.

• Cost type. Describe the type of cost. This way, stakeholders know exactly where to classify this item.

• The amount for item. Here you describe the costs of any particular task at its minimum level. For example, you can indicate how much an employee earns per hour. This will also depend on the specific task. Besides, some jobs are only charged in full. 

• Total amount. This corresponds to the total cost for all the hours worked. For example, an employee works for USD$20 per hour, taking eight hours to complete their task. Then you must include the total, i.e., USD$160.   

• Quantity. When you indicate what materials and resources you will use, it's necessary to clarify the quantity of those items. Utilizing the same example before, you will need five hundred bricks to build a wall. So, you must indicate this quantity, the cost element, and the total cost. 

• Total cost. Finally, you must indicate the total cost of a specific task. For example, building a brick wall requires bricks, mortar, water, a manager, and two operators. All these items have different quantities, costs per unit, and costs per hour. You must sum all these factors together to obtain the total cost of that task.

• Cost Explanation. This part is not mandatory, but you can insert a section describing each cost and its reason.  

Calculate General Costs

Finally, you must sum all the total costs to obtain the general cost of the entire project. Of course, in the final section of the document, you should include legal insurance and the percentage of profit you get.

Submit for Proposal

After reviewing the proposal and ensuring everything is in order, you must submit it for approval. This way, direct investors and other stakeholders can study the document and approve or disapprove the proposed budget. Your proposal should include an area at the bottom for stakeholders to sign the document.

The following business templates will help you write a budget proposal for any business or industry. Besides, if you're starting your business, these are valuable tools to attract new clients.

You'll need the Microsoft Office suite to edit these files, which you can get from us. We recommend you get Microsoft Office 2021 Professional Plus Key Retail Global since this copy contains all the applications you need to manage these templates. 

Regarding applications, Microsoft Excel is the proper app to customize related templates and even quickly build your own. This Office app boasts all the specific performance tools and delivers a clear budget proposal.

Free Budget Proposal Template

Download it from Smartsheet.

This free template is a simple document that allows you to indicate items and their costs. The best of this document is that it divides cost into categories. This file contains categories: Utilities, Professional Services, Travel Costs, and others. The only downside is that you can only insert any item's final cost.

Yearly Proposal Budget Template

Download it from Templatelab.

This proposal template is longer than the previous one since it incorporates several other pieces of information, such as participation costs, equipment, materials and supplies, printing and duplication, consulting services, travel expenses, and fringe benefits. Besides, this template contains yearly columns to indicate the cost per year. 

Simple Budget Proposal Template

Download it from Vertex42.

This is a basic template containing two main sections: income and expenses. The first section defines different income categories and the actual and estimated budget to calculate the difference between both quantities. The second section includes operating expenses, such as server fees, advertising, depreciation, marketing department expenses, direct labor, the cost of the office space, maintenance and repairs, supplies, taxes and licenses, and more. Finally, you can calculate the net income and revenue. 

In order to secure investments and garner support from stakeholders, it is crucial to provide a clear and comprehensive explanation of expenditures and how they contribute to the successful completion of a project. The most suitable document for this purpose is a Budget Proposal Template.

For other templates for providing deliverables and outcomes, please browse the blog of RoyalCDKeys. Here you find relevant tools for businesses of all sizes and even software to help you accomplish your goals.