Banke Ajagunna: Getting A Hang Of Budgeting When Undertaking A Project

Oh the thrill, excitement and fun that Interior Design should be, right? But what people don’t see and think about are the days and nights that go into planning, making sure the right processes are in place, staying spot-on with vendor management, research work, project management, sourcing, and my least favourite part … BUDGETING.

The irony of this is I like to make money and it would only make sense that I should like everything money-related but managing funds during a project is a nightmare.

A major challenge when planning for a project is financial budgeting, and we’ve seen that the finance management problem cuts across all sectors, not just Interior Design. I remember this tech company that charged their client a fee for a project, erroneously thinking they had planned for all potential setbacks . To their surprise, as they kept building the software they ran into more and more technical difficulties than they had envisaged, and they couldn’t return to the client to request more funds. Long story short, they couldn’t deliver on their promise and ran into major issues with that client.

Unfortunately, this happens to even the best of us. Financial management is a critical skill everyone must possess, even in our personal lives, else we’ll keep running into debt.

Budget overrun is the bane of any project manager’s work, especially when the bulk of a  project is heavily dependent on external purchases; one can hardly control price fluctuation and product availability. For instance, you might see a product at a store and go back a week or two after, only  to discover that it’s been sold out and the only way to get it is to import it. The first scare is the unfriendly exchange rate, then you worry about Customs, next you think about the time that would be lost waiting for the delivery to be made — and it doesn’t end there. Meanwhile, you’ve made estimates based on your previous knowledge of market prices. Who are you going to cry fowl to? Let’s not forget about those costly mistakes that we encounter on-site that usually cost a leg.

Another reason I think budgeting is of the devil is that I am an ‘overachiever’ when it comes to designing a space. If I see an item I know would make all the  difference in the space I’m designing, I won’t hesitate to go for it.

How can you then try to Manage Spendings vs Budget?

Contingency Allowances
We label this as ‘Escrow’ when we send an invoice to our client and usually set it at 3-5% depending on the unforeseen risk we think we might encounter in future — these risks vary from project to project.

Scoring for Bargains
Occasionally, we come across retail stores that are running a sale and this helps you save some, but because the industry isn’t robust enough and there are only a few stores we like to get our products from, we only get this occasionally.

Create a Spreadsheet
This helps you monitor and balance expenses. A handy line item budget helps us track our actual spendings against the estimated budget. In instances when an item is cheaper than the estimated cost, we allocate the extra to buying a finer piece of furniture from the unbought items.

Building Locally
Also called Made in Nigeria. We often delve into these uncertain territory, but there are some issues here too — quality control, honesty and late deliveries.
There are other budget control systems that managers use for effective and efficient delivery, and we would love to hear which ones you’ve adapted in the past or what processes you are using currently to manage projects!

Photo Credit: © Lowa Dobrey Jeanne Dadi | Dreamstime.com