Planning a Budget
How circumstances can and should factor into the budget planning process
See here for info on dealing with difficult clients and stakeholders
Any good strategy should take the surrounding environment into the equation. A popular example of this in business would be the Porter's 5 Forces model.
Plan for what you have and what you're likely to face. Be realistic about budget constraints, resource allocation, and the realities of overspending. If possible, make a forecast worst-to-best case scenarios, alongside an estimate of what each scenario might cost and generate. (Note: not standard OpenUp practice, but it should probably be done anyway).
When planning a budget, consider the political situation. Think about:
The possible trajectory of South Africa (politically, socially, environmentally) within the lifespan of the project.
How will these factors affect our mission? Our clients? The people we serve? How might they affect demand and production?
Dealing with the Unexpected
No one predicted the COVID-19 crisis while forecasting for 2020. That said, at the time of writing, Wimbleton's organizers are expecting $141 million dollar payout as a result of 17 years of pandemic insurance. After the 2003 SARS outbreak, they made a point to pay $2 million for pandemic insurance every year. While most businesses (including OpenUp) can't afford to do this, it's not a bad idea to make contingency plans.
Taking stock of our resources
The Cost of Quality vs Quantity
Estimating Costs
On estimating:
staff costs: the blanket internal rate is a baseline.
external resources: ‘I think it’s fair to say that project managers mostly work with the same contractors, so they’re quite comfortable in predicting. They know what those independent contractors charge, and how long they need to do certain things. So I think from a longstanding relationship with independent contractors, it’s quite easy (I think) to estimate.’ (Janine P.)
Historical Costs
Historically-based budget forecasting is a three-part exercise in social studies, archival digging, and oracular prognostication.
On estimating:
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