Whether a project is big or small, a project manager will have budget constraints to work with, or around. In some cases the budget is large enough to allow for whatever resources are needed, without additional worry over the costs involved. However, at times that budget can be so narrow and limiting, that a project manager needs to think long and hard as to how to manage working with such a small budget, yet still ensure a successful project outcome.

For project managers under these tight budget circumstances, there are a range of ways to handle the constraints. But the first task at hand is to realize that the budget size is not the most important aspect of the project, as having a multi-million dollar project does not guarantee success, nor is the opposite true, i.e. a shoestring budget does not mean inevitable failure.

To manage a project with a small budget, project managers should first focus on dividing that project into smaller phases, making sure that the most important elements get priority. This ensures that the project will not run out of money before the critical elements are complete.

Then, the project manager should look for ways to save money. This could mean considering the use of open source software rather than proprietary versions that will cost a great deal more, for example. Another example would be to host solutions on a shared hosting environment, which will also save on costs. Furthermore, if the project is being handled within the scope of a larger project or at a large company, look at what other resources are available outside of the project team. Is hiring a Subject Matter Expert really necessary if that same knowledge and experience can be found within the company? While these in-company resources are unlikely to be able to devote themselves full-time to the project, they can certainly add input as needed.

And how about looking at the project team members themselves? Each member may be slated for a particular function or task for the project, but there may be overlap that could negate the need for all the members, which would eliminate some personnel costs for the work. Make sure that you as project manager know exactly what each member is capable of, in order to maximize their utilization.

A final way to keep costs down is to eliminate window-dressing, or the influx of senior executives who swoop in to give their stamp of approval or to offer input at the last minute, input that’s no longer necessary. These personnel costs are generally very high, yet have a low rate of return in terms of the actual knowledge that’s imparted.

By taking all of these methods under advisement, any project manager will be well on the way to having a project that is on time and within costs, no matter how small that budget might be. How do you keep your budget on target?  Come tell us on Project Management Facebook Page!

If you’re looking for more on this, take a look at our 10 PDU-Leadership & Performance Management Course and get some more ideas on reigning in performance and staying on budget.