I''m in negotiations with a publishing house on a development project that they really seem to be interested in..but my problem is submitting a decent budget proposal. What i''m looking for is a sample Budget plan for large development porject. I know all budgets vary, what i''m looking for is a basic model for creating one..so if there''s anyone out there that can help I would really appreciate the help.
Here''s some advice from my own experience. Others may be able to improve on this.
1. Unless the project is going to take multiple *years*, budget it out in months.
2. I assume you''ve determined how big your team needs to be, so take that and figure out how many months (and which months) you''ll need each team member. For instance, you''ll need the "Project Leader" the entire project, but you may only need the "Composer" for the last 6 months.
3. Determine how much you''ll budget per month for each position. Come up with a reasonable number, and then inflate it by about 10%-20% to cover overhead and allow for more flexibility when negotiating their pay with *them*. Also, if you actually *hire* these people, rather than simply contract them, the payroll becomes more complex, as well as the other human resources headaches begin to apply in earnest. This is a topic of its own, so let it simply be said that you''ll need to research this.
4. Use the per month pay in #3 and the number of months in #2 to determine your budget for each team member.
5. If you expect to have to lease/rent office space, find out how much that will run per month, and plot it out per month across the duration of the project. Make sure you have enough "space" for all the team members you expect to have.
6. Similarly, if you expect to have to provide tools (PCs, software, etc.) to the various team members, find out how much that is going to run you per team member. If you already own some of what you''ll need (from a past project, for instance) then you can note that somewhere as a possible cost reduction.
7. If you''ve worked out the milestones for the project already, work up some numbers for those milestones that will keep you covered between them. If your first milestone is 3 months out, have your starting money cover as much as 4-5 months of expenses, if possible. Basically, try to have each milestone''s payment cover the *next* milestone''s development period.
I hope this is at least somewhat helpful. I''ve only done this a couple of times myself, and don''t consider myself an expert.
- When your budgeting for the project add a percentage to every full time employees base salary. This percentage covers their benefits and is estimated at Venusoft to be about 30 - 34%. This will allow you to be competitive in the marketplace by paying for their helth insurance, giving a good amount of days off, etc., etc.
- When I budget for my projects I take nothing that I have within the company already into consideration. The reason for this is that when you take something that you already have into account, you add risk to the project. For instance, I already have a network administrator working with me so I do not need to include his salary in the plan. Wonderful, you've reduced the budget needed until this guys quits on you or is needed for something else you have the company doing. By placing a network admin in your proposal, you hedge off the risk associated with losing that person because you can replace the one you lost without eating at some other portion of your budget. In the end if he doesn't leave you will have more money to cover some of the other things that will inevitably not go right.
- Also add an upgrade/maintenance percentage to your infrastructure costs. I determined how much we were going to spend on internet connections, building costs, hardware, servers, and workstations and then increased the amount by 10%. Again if I don't spend it on what it was intended for there will be money to spend in the budget on something that didn't go right along the way or something that was underestimated in another part of the budget.
If in the end you have a budget that you can justify is worth the risk to the publisher, while knowing that you have reduced the risk of having to have everything go right for you to be successful, then you have created a good budget. The inflations are not pure inflations, they are educated estimations that allow you to make up for places where you may have guessed wrong. Besides the publisher is going to reduce the number from there so you know you have something to play with during those negotiations.
ps Remeber, everytime you cut a cost because your company has it covered or it is already taken care of, you need to determine if it is reasonable to assume that the resource will work right and be there for the parts of the project you need it to be. If it has a chance of not being there or being tasked to something else, then it is best not to reduce the budget by the resource's cost. You will in the end only increase the risk of your project succeeding. A resource is anything hardware, software, or human that is needed to make the project or the company operate.
Edited by - kressilac on June 10, 2000 12:41:28 AM
Let me put up one additional though. I like to use a monthly cash flow statement to deal with projects under three years to production. The cash flow statement forces you to think about monies coming into the company and monies going out. It will tell you when you need money and how much you need. When setting this up be sure to add 30 - 60 days for all monies coming in as accounts recievables are typically paid in this timefame. Add 30 - 45 days for procurement of computers and connectivity, 45 - 90 days for office space, and 1 - 30 days for accounts payable. You should be able to see where your needs are and compare that to you milestones and develop a schedule for how you need funding.
Kressilac When your done roll it up to quarterly, and then half year, and finally yearly to get aggregated numbers for an overall view of the project. Send me an email and I will send you the spreadsheet that we are using to figure one of our projects out. I think you will find it handy.