Unforeseen circumstances such as sudden emergencies, problems with vendors, natural disasters, or working capital shortages can all cost a business money. When these types of obstacles occur (especially when you least expect it,) it can certainly throw you off a bit.
When a project goes over budget, it's easy to panic and begin pointing fingers. Fortunately, there are a few different courses of action you can take to mitigate the damage.
Seek Additional Funding
Despite what people often hear about the dangers of "throwing good money after the bad", a quick and guaranteed solution to a project going over budget is to simply add more money to the budget.
Granted, not every company has the budget of Google or Apple, allocating potentially tens of thousands of dollars on short notice isn't necessarily within the capabilities of many small and medium sized businesses.
But do not be discouraged! Business loans are a fantastic method of tiding the project over while maintaining financial stability.
Scale Down the Project
Nobody sets aside time and funds for a project only to have to compromise on their vision. However, sometimes projects alterations are necessary.
When time is running out and the budget isn't there, adjusting the project's scope may be the best way to salvage the situation.
By effectively making the project smaller than it was before, your company can lower financial costs while retaining deadlines and overall scope.
Analyze Your Overhead
If you find yourself searching for additional funds in order to source a new project, have you considered taking a second look at some of your overhead costs?
Our sister company, CMS Technology Partners, specializes in a vendor-neutral approach to cut costs on technology expenses company-wide. This can free up an exponential amount of money which will allow you to allocate resources to other projects. If cuts can be made without damaging the end product, it’s certainly worth a call.
The Bottom Line
Having a project exceed the budget isn't necessarily the end of the world! It's important to identify the issues that are causing the project to go over budget and make necessary changes quickly and efficiently.