As a company owner, you are likely constantly planning new projects to pursue.

For long-term projects, you might have to select which staff members will work on them, purchase software and other necessary items, construct a time frame outlining milestones to hit by certain dates and the list goes on. These projects have many elements to consider, but there is one major step you have to take before anything else: Setting a strict project budget to adhere to.

In my experience, I have seen how important it is for businesses to prepare budgets for long-term projects. Here is an overview of why long-term project budgets are pivotal and helpful tips for business owners to keep in mind:

Why long-term projects need a budget

Improving the bottom line should be a top priority for business owners. If you don’t have a project budget, it can be so easy to have a “the sky’s the limit” mindset and spend an outrageous amount of money that can end up hurting your business’ bottom line and financial health in the long run.

Having a strict budget will help you and your team decide what costs are absolutely needed to make the project a success, which will keep you all from spending frivolously.

On top of this, having a project budget can help you and your team adhere to a designated time line.

For example, if your business needs to send items that will be used to manufacture a new product line before a specific deadline, you know you will need to ship the items well before the date so that you don’t end up spending money on overnight shipping (which can cause the project to go over budget).

If you are looking to set a budget for a new project, make sure to keep these helpful tips in mind:

Have a meeting for project decision makers to discuss the budget

Will the marketing department, customer service department and accounting department all be involved in this project?

One department’s team lead might have a different idea of what the project’s total costs will be than another.

For example, a social media team lead might know that the price of a Facebook advertising campaign is way higher than what another department head thinks it would be. That said, having a meeting for all of the project’s decision makers will give everyone the chance to share their thoughts and come to an agreement on which budget to select.

Use a cloud-based spreadsheet platform to list out essential expenses

It is easy to forget about minor project costs that can add up and cause you to go over the total amount you thought the project would cost.

If you are expanding services into a new city or country, you might forget to include the price of a localized Google ad campaign targeting potential customers in the new market. That is why it is vital to spend time thinking of every single cost involved in the project and recording them in a spreadsheet. These can include the hourly costs for local contractors who will help, software subscriptions, printed documents, flights for team members, etc.

You might be thinking that you could just make a mental list of all of the expenses then select a general spending threshold to not go over, but it can be so easy to forget smaller costs (like the cost of a packing or shipping supplies you need). Taking the time to list out every single essential expense will help you select the best project budget possible.

Now, it will be wise to use a cloud-based spreadsheet platform to list the expenses, rather than a Word Document or Excel spreadsheet. The reason for this is that if you ever need to add on a new project expense or remove one, you can easily do that on your phone while on the go.

Or, if you and your team spend more on some costs, you can easily adjust the budget for the rest of the project on your phone. Your team will be able to access the spreadsheet whenever they need to as well.

Ensure everyone working on the project is aware of the budget

The last thing you would want is for a team member to accidentally and unknowingly overspend on ordering supplies or another project element just because they didn’t know there was a strict budget in place.

So make sure all of your team members working on the project are aware of the budget. If one person doesn’t know it, that could end up making a decision that causes the whole project to go over budget. Make sure everyone has access to the aforementioned cloud-based spreadsheet so they can stay in the loop about total costs up to a certain point, how much of the budget is available, etc.

Have regular meetings specifically to review the budget

You don’t want to just set the budget then hope all of the project’s decision makers abide by it.

Especially for projects that will take months, a year or even more to complete, it can be easy for unforeseen costs and/or roadblocks to pop up that could cause you to go way over budget. So set a weekly or biweekly meeting for the project’s decision makers to go over the budget, share updates on where their teams are at, check to make sure milestones are being hit on certain dates, etc.

This will keep the project on track to be completed by a designated deadline, all while keeping it under budget.

Following these steps will help set you and your business up for budgeting success.