project budget planning Bureau Flo product mangament

When preparing for the selection of new product ideas in the Fuzzy Idea phase, one thing you need to know is how big the investment cost into this new product development is going to be. 

Making profit on a new product is one of the key parameters in the decision to start a new product development.

A realistic project budget, to realise your new product idea, is needed to calculate the profit and the pay back time.

As nothing is for free in life, there are many items which need to be taken into account when defining the project budget. The risk of forgetting lots of small items is definitely there in the busy lives of product & project managers :-).

If you are part of them, you might want to take a peek at my Project Budget Planner.

3 tips to help you define a realistic project budget.

1. Check predecessor products

When starting a new product development, most of the time you have predecessor products. These predecessors have a track record in costs, margin and sales.

You can use this existing information to estimate the required budget for your new product.

2. Organise a brainstorm meeting

If you are starting a complete new product innovation, you probably will need to do more research to estimate the investment costs. Gather around a white board with your colleagues from product & project management, sales, marketing, finance, development and marcom.

Probably with all the knowledge these disciplines have, you can make estimations and define actions to gather data on the open topics.

3. Follow-up and adjust the budget

During the development of a new product, regularly check the estimated budget and adjust if needed. This gives you the opportunity to predict other cost increases in the budget and you are able to take action if needed.

Project Budget Planner

To make life more easy for you, I have created a Project Budget Planner tool.

This tool in Excel lists the various cost elements. You can differentiate these investment costs over different regions and years. 

When your project is moving into the Feasibility phase, you can use your Project Budget Planner to further detail and split up the project costs.

Download the Project Budget Planner to help you define a realistic project budget.

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