1. Estimating people requirements
In order to estimate people requirements, you need a task list and the timeframe for each task (this should be in your task plan). Once you know how long each task will take and what level of expertise is required, you can fairly accurately estimate how many and what type of people you need to complete the task.
Example:
If you know a task will take 30 hours and requires engineering expertise, you can safely estimate that one experienced engineer could complete that task in one standard 37 hour working week. Plus you have 7 hours of additional time to allow for any unforeseen issues.
2. Estimating equipment and materials
Look at each task/activity and identify what equipment and materials you need to complete that task. Depending on your role and the type of work you do, this could be a very long or very short list - in fact you may even be able to skip this step altogether.
For example, if you were working on a small construction project, the list of equipment and materials needed to do the job would be quite considerable. However, if you were working on a small internal project within an office, you may only need stationery and computers - which you probably already have anyway. In the case of the latter, identifying the equipment and materials that you need might be unnecessary.
Budgeting
A budget is an estimate of how much it is going to cost to execute your plan. Although some people tend to be scared off by budgeting, if you have accurate estimates of your people and resource requirements, it's really just applying a dollar value to those estimates and adding it all up.
People costs
Hourly rates
If you are budgeting for contractors, casual workers or anyone charged at an hourly rate, simply calculate the hours you need them for and multiply it by their hourly rate (e.g. $35 x 40 hr).
Salaries
If you are budgeting for salaried employees, divide their yearly salary into days (or hours), then multiply that figure according to how long you need them for.
Then, just add it all up.
Equipment and materials costs
Go through your list of materials and equipment and estimate the amount that each one will cost. If you don’t have reliable information about the cost of these items, you may need to speak to your procurement department.
You may want to add an extra 20% to the equipment and materials costs to be sure it's a safe estimate.
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