A budget proposal is a key part of business planning. Creating a sample proposed budget gets all stakeholders on the same page for a new project. Whether you’re starting a new business, or need funding to expand your business with a new service or product, a budget proposal will help you sell your idea to investors or lenders, and help them understand exactly how much you need from them.
At SignHouse, our goal is to help businesses with all their documents, contract, and productivity needs – and there are certainly a lot of them! Understanding how a budget proposal is put together will help you to create your own killer proposal for your next project and start your contract negotiations off on the right foot. With that in mind, let’s get into it.
What Is A Budget Proposal?
A budget proposal is a list of all the costs and potential revenue associated with a new business activity. It’s created before the project begins and is not an actual budget for the activity. Instead, it’s a guideline for investors and stakeholders, to gauge the estimated advantages, disadvantages, risks, and benefits of a project before it begins.
The ultimate goal, of course, is to showcase your project so that it can get financial backing from investors. It can also be used to make sure the project originators have thought of all the possible costs. Having a budget proposal means that the project is more likely to succeed once it gets past the planning phase.
What Is A Budget Proposal Template?
A budget proposal template simplifies the budget proposal planning process. Sometimes, it can be difficult to think of all the potential costs for a project, and a template helps to nail down the cost structure, so you can focus your energy on the creative parts of the project.
Having a reusable template allows you to see all the potential cost categories for your project. It gives you a place to calculate and list each cost for your business idea. Investors and stakeholders need calculations and proof for each cost associated with a project – ballpark estimations are not enough. A budget template usually includes the following sections:
- Labor costs
- Material costs (if any)
- Outside consulting costs (legal, etc.)
- Any other project costs (insurance, for instance)
Whether you are creating a budget template for a new client or for an investor, an accurate estimate for project cost can mean the difference between your project going forward, or dying on the first hurdle. An accurate estimate gives you the confidence to charge the full price your work is worth. It also gives investors, clients, or other stakeholders confidence that they will get their money’s worth in their investment.
Having a template gives you a basic structure to start with. You can use the template to save time for multiple proposals. It also gives you peace of mind that you haven’t overlooked any hidden costs in the planning process that might surprise you or your stakeholders later on.
Example Template of Budget Proposal
[Name of Project]
This project has been prepared by [names]. This proposal contains all estimated costs for the project, as well as an estimated timeline of the project. This will give all stakeholders a full picture of the project’s total cost over financial, time, personnel, and other factors.
Estimated Project Timeline
We estimate that the project will take a total of [time], broken down as follows:
Total Project Time: [days]
Estimated Start Date: [date]
Estimated Finish Date: [date]
Phase 1: [description of activities in first phase] [budgeted time for these activities]
Phase 2: [description of activities in second phase] [budgeted time for these activities]
Phase 3: [description of activities in third phase] [budgeted time for these activities]
Number of team members working on the project: [number]
Number of estimated hours for team member #1: [number]
Team member #1 labor rate: [rate]
Team member #1 labor cost: [$ cost]
Number of estimated hours for team member #2: [number]
Team member #2 labor rate: [rate]
Team member #2 labor cost: [$ cost]
Number of estimated hours for team member #3: [number]
Team member #3 labor rate: [rate]
Team member #3 labor cost: [$ cost]
Total labor cost for project: [cost]
Material list for project:
Item #1……………….[$ cost]
Item #2……………….[$ cost]
Item #3……………….[$ cost]
Item #4……………….[$ cost]
Total material cost for project: [$ cost]
Travel and miscellaneous costs for project:
Total other expenses: [cost]
Given the total cost for each category, the total estimated project cost will be:
Total labor cost……………………..[cost]
Total material cost………………….[cost]
Total other cost……………………..[cost]
Total project cost …………………..[cost]
Why is a Budget Proposal Important?
Helps Determine Profitability
The budget proposal helps you see whether you should pursue a project at all. If you get through a budget proposal and see that there is no way a project can be profitable, you can save yourself, your clients, and your investors a lot of grief by switching to a different project as soon as possible.
Helps Stakeholders Visualize the Budget
One of the most important question for stakeholders is, “How much is this going to cost?”
A budget proposal gives a professional, confident answer to this question. Depending on how extensive you want your proposal to be, your budget proposal can also include information about:
- Which team members will work on the project
- Their professional qualifications and expertise
- An estimated timeline for the project, including milestones
The budget proposal lays out project costs for everyone to see. Not only is this important during the planning phase of a project, but also during the project execution and after completion. If certain categories of the project start to look like they will go over budget, having a written budget proposal in place gives both parties a benchmark for project costs.
A simple budget proposal is just that: an outline of the costs associated with a project. Some people also like to add a signature to the end of a budget proposal to signify agreement with the proposed terms, before they move on to a contract. Need a separate contract to go with your budget proposal? Check out SignHouse’s library of contract templates for your freelance and small business needs.
How to Create a Template for a Budget Proposal
Need something special? Follow the steps below to write out a custom budget proposal. If you need to add both parties’ signatures for agreement at the bottom, don’t forget to use SignHouse’s PDF signature tools to add e-signatures to your document.
Step 1: Write Your Objectives
Outline the objectives of the project. You need to know what your overall project goal is, what problem you will be solving for your client, and your roadmap to get to that goal.
Step 2: Outline Your Cost Elements
Outline each section of the project costs. Most projects will have three elements:
- Labor cost
- Material cost
- Overhead or miscellaneous costs
Other, larger projects may include other categories as well:
- Outside expertise costs (ex. accounting or legal)
- Travel costs
- Utility costs
- Insurance costs
Make every effort to include every cost for a project. Unplanned costs in the middle of a project lead to underpaid contractors and unhappy clients.
Step 3: Break Down Costs
As outlined above, break down each cost as much as necessary. For example, if more than one freelancer or contractor will be working on the project, be sure to note each person’s hourly rate or per-project cost. Accurate detail is one of the biggest markers of confidence for your clients and stakeholders. It shows you’ve done your research.
Step 4: Mention Anticipated Revenue
This section is where you can answer the largest question clients and stakeholders have about any project: “What’s in it for me?”
For investors and lenders, you can create a budgeted income statement showing the revenue you anticipate from the project, and how much profit you anticipate after your budgeted costs.
Step 5: Review
In this section, you can give a review of the project overall and any final selling points. Some contractors like to include a signature at the end of a budget proposal to signify agreement to the budget terms by both parties, so they can move forward to a contract. If you choose to include a signature section in your budget proposal, you can use SignHouse’s e-signature tools to add your own signature, and send it to your client for easy signing.
Promote SignHouse and Conclusion
Budgeting can sound intimidating, but it’s a critical part of success for business owners and contractors. Having a template in place makes it easy to plug in your numbers, leaving you more time to prepare for a pitch to investors.
SignHouse has a full library of templates for all your business needs. Whether you need a budget template like this one, a contract for freelancers around the globe, an NDA, and more, we have what you need. Once you have the exact contract you need, you and your team can securely sign it in minutes with SignHouse’s e-signature creation and signature tools.
Ready to get started? Check out SignHouse’s contractor toolbox today.
Are digitally signed payment agreements legal?
Yes, they are 100% legal if you add your signature to them with SignHouse.
How can I sign a proposal for free?
Upload the proposal to SignHouse > Create your signature > Put it on the document. No need to pay!
Should a proposal have a signature?
Yes, it's mandatory that a proposal has signatures. You can electronically sign an online proposal with SignHouse for free.