Budget Estimate
A Budget Estimate is a mid-stage cost estimate — more refined than the very rough early guess, but still not the final, locked-in number. By the time you make a budget estimate, you have done more planning and understand the project better, so you can narrow your range and give stakeholders a more trustworthy figure for financial planning.
The typical budget estimate range is from −10% to +25% of your estimate. That means the actual cost could come in up to 10% below or up to 25% above your figure. To apply it, you take your current estimate and calculate the low and high boundaries using those percentages.
How do you read it? Notice this range is much tighter than a Rough Order of Magnitude, which reflects your growing confidence. A project manager uses a budget estimate during the planning phase, once enough detail exists to allocate funds — but before every last requirement is nailed down. Later, as planning finishes, it tightens again into a definitive estimate that is used for the final, committed budget.
Think of it like getting a contractor's written quote after they've actually inspected your house and taken measurements, versus their quick glance from the driveway. It's still not the final invoice, but it's close enough that you can confidently set aside money for the project.
Continuing the mobile app example, after some planning your estimate is now $120,000. Using the budget estimate range: the low end is $120,000 minus 10% ($12,000), which is $108,000. The high end is $120,000 plus 25% ($30,000), which is $150,000. So you'd tell stakeholders, "Plan for somewhere between $108,000 and $150,000" — a noticeably tighter and more reliable range than the earlier rough guess.
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