A starting point for budgeting is to enlist all inputs needed to deliver the programme activities as defined in the programme description and the marketing plan. The budget makes clear which and what level of inputs are needed and how the expenses for these inputs will be covered by future income.

The budget is a summary of:

• expected expenses for programme inputs and
• expected income/revenues for programme outputs

Additionally, you will have to consider a contribution to the fixed costs of the institution (staff salaries, office rent, electricity, communication cost, etc.). Most institutions add a certain cost margin, e.g. 10 – 15 %, to contribute to the payment of fixed costs.

In order to estimate the expected revenue, you will also have to know the prices you will charge for your specific programmes and services. In our example and worksheet we will demonstrate how to set prices that cover programme expenses, fixed costs and a potential profit margin.

Hereby, we introduce a very important ratio - the Break-Even Point: this point shows you how much you have to earn (via sales and funding) in order to cover all expenses. If we speak of training programmes or consulting services, it means how many training courses or consulting hours you need to sell at a given price in order to have "0" deficit.