Projects are investments made by a company or organization to achieve something of worth. Whether it is developing a new product or improving the way the organization operates, there is value in successfully completing the project. As such, there is always a cost involved with initiating, planning, executing, monitoring, and closing a project. Not only does the organization need to pay the salaries of the project manager and team, but there are potentially many other costs of the project. As demonstrated in the project funding requirements template, some of these include equipment/technology, overhead (taxes, utilities, leases), or other materials needed to complete the work.
Most projects do not get started until a thorough analysis is done on how much funding is required to complete the project and what the return on investment will be. These determinations help establish the project’s cost baseline. However, once the project is approved there must be funding in place to begin the work. There are many ways projects receive their funds. Some projects receive all of the required funding up front and the project manager carefully manages the funds over the project’s lifecycle. Many projects receive funds incrementally based on project phases of the accomplishment of milestones. The project team and sponsor must determine the most effective way to allocate project funds and incorporate any reserves identified.
Sample Project Funding Requirement Table with Sample Data:
|Project Funding Requirements|
|Project Phase||Funding Type||January||February||March||April||May||June||July|
|Initiation||Equipment / Capital||$5,000|
|Planning||Equipment / Capital||$10,000|
|Design||Equipment / Capital||$22,000|
|Prototype Build||Equipment / Capital||$52,000|
|Testing||Equipment / Capital||$25,000|
|Transition to Operations||Manpower||$62,000|
|Transition to Operations||Equipment / Capital||$45,000|
|Project Closeout||Equipment / Capital||$0|
*This table includes a 5% management reserve for each project phase.