Build a budget that reflects full cost and real capacity

Decision question

Are financial, human and external resources sufficient to execute the plan?

Decision

Trade off budget, workload, timing or scope.

Test the financial and operational feasibility of the portfolio over time. This step produces reviewable commitments and flags information that remains too fragile to justify a trade-off.

Expected outputs

01Phased budget

02Workload

03Overloads

04Alternative scenarios

Calculation · SQ-35

Allocate budget using risk-adjusted value

Comparing gross return rewards optimistic assumptions. Adjusted value combines contribution, probability, full cost and risk exposure.

Working context

Illustrative case: five candidate initiatives for a €400k envelope.

01Estimate
Quantify contribution, probability and full cost.
02Expose
Calculate the expected loss from material risks.
03Adjust
Subtract cost and exposure from probability-weighted contribution.
04Allocate
Compose the portfolio under budget and capacity constraints.

Original element

Adjusted value of five initiatives

ABM has the highest gross contribution, but Search delivers the best adjusted value.

Calculation methodAdjusted value = contribution × probability − full cost − expected loss

Initiative	Contribution	Probability	Cost	Expected loss	Adjusted value
Search	€520k	75%	€95k	€20k	€275k
ABM	€760k	45%	€150k	€55k	€137k
CRM	€280k	80%	€35k	€12k	€177k
Content	€330k	65%	€80k	€18k	€117k
Event	€440k	40%	€125k	€42k	€9k

Decision interpretation

01Search and CRM are funded first for €130k.

02ABM remains in the portfolio as a limited pilot that reduces cost and exposure.

03The event is not selected despite a gross contribution of €440k.

Fictitious data. Contribution and probability must be documented separately to avoid false precision.

Minimum controls

What the plan must make visible.

01Full cost

Status, evidence, owner and next review date.

02Contingency

Status, evidence, owner and next review date.

03Availability

Status, evidence, owner and next review date.

04Identified bottlenecks

Status, evidence, owner and next review date.

Related resources

Budget × capacity calculator and decision content.

C26Build a zero-based marketing budgetZero-based grid C27Calculate the full cost of a marketing initiativeFull-cost calculation C28Build a marketing capacity planWorkload plan C29Compare budget scenariosBudget comparison C60Calculate budget × capacity feasibilityJoint-feasibility calculator C61Defend a marketing budget in committeeCritical comparison of arguments C68Trigger a reforecast from a return signalReforecast decision file C69Size a marketing contingency reserveResidual-exposure calculation C82Fund initiatives under budget and capacity constraintsInitiative allocation set C94Calculate the cost of marketing inactionSix-month costed inaction case

Next step · 07Roadmap & dependencies