Very early in many projects, you’re often faced with the need to define the project that you can deliver for the available funds. Preparation for bond or capital campaigns are classic examples. Your crediblity as a manager depends on setting a realistic expectation.
In order to establish this realistic expectation among stake holders, a thoughtful budget, coupled with a prioritized list of project goals, is essential. Even at a very early stage, you can offer a high confidence that highest priority goals will be achieved, while striving to include as many lower priority goals as can be accommodated within the limitations of the funds actually available.
Your financial projection might be structured as follows:
- Unavoidable infrasturcture/code – This may include a leaking roof, an ancient heating/air conditioning system, site and infrastructure or dangerous fire safety or siesmic isssues. It can amount to 20%, or even more, of available funds. This work ususally doesn’t include any hoped for program work.
- Core project scope – From your wish list, identify a core of critical work that results in a completelly functioning facility. When added to the budget above this should bring the total to approximately 70% of available funds. This is the project you offer to your constituents. Choosing a particular percent is flexible, but don’t make it 90%
- Possible project scope – Establish a priortized list of all other scope. From that list, define a hoped for scope that, when added to the work above, will bring the total to 120% of available funds. Again the exact percent is flexible. Ideally, it should be possible to add these items independently, some added in mid-project if early risky tasks go better than expected. This isn’t a promise but an aspiration. You hope to achieve some, but not all of this work.
- Everything else – This is the rest of the work on your priortized list. If you’ve shown that you are a responsible capital projects manager, fundrasing for future projects will be much easier.
Through this strategy, you have effectively built in a 30% contingency while still holding out hope for some of the scope that has less of a chance being achieved. This may even spur the fundraising effort to unexpected heights.