Once we get a helicopter view of the project, we start calculating the budget. Engineers are not really good at numbers and budget. Here are the list of items that should be taken into consideration.
To determine project costs, give a thought on the following categories
Personnel: This is typically largest part of the budget. They can be current employees, contract employees.
Travel: Its based on whether your employees are onsite or they have to be brought to location.
Training: I would advice people to look at training as a investment and spend wisely. If training involves guest lectures or support, they also need to be calculated.
Supplies: In addition to pen, paper, Is there any special equipment that you need. It could be even computers.
Office Space: How much room is required and at what cost?
Research: Do you have to buy studies or data to support your project? Is your team capable of performing research. If yes at what cost.
Capital Expenditures: What is the expensive equipment or upgrades that would be necessary. It would be great if the capital expenditure can pay for themselves.
Overhead: It includes your projected overhead expense. So this would help you to fix Standard Overhead percentage.
Other Costs:
Maintenance, Insurance, Licensing, Legal, Accounting
A budget no matter how carefully planned is still your best guess.
Fully fund a project or do not start it
— Norman R Augustine
Balaji Informal Learning Blog 