What are Required Resources?

Required resources (frequently referred to as required funds or capital) encompass the total volume of financing, materials, technology, or human labor necessary to successfully accomplish a specific project, investment, or business plan.

In financial and economic contexts, this term most often denotes the financial capital an entity requests from an investor, bank, or grant provider. Accurately determining these resources forms the cornerstone of every budget. Without a clear understanding of the necessary funding, it is impossible to realistically evaluate the feasibility or return on investment of any initiative.

Where Are Required Resources Commonly Used?

Establishing required resources is a critical step in various areas of corporate management and finance. Typical applications include:

• Business Plans: When applying for a bank loan or searching for investors, founders must precisely specify the capital needed to launch or expand their business.
• Grant Programs: In subsidy applications, required resources represent the amount requested from the grant provider, usually calculated after deducting mandatory co-financing.
• Project Management: During the initial planning phase, project managers define required resources, encompassing not only capital but also time and team capacity.
• Public Procurement: Both contracting authorities and suppliers must have a clear understanding of the resources required to fulfill the contract scope.

How to Properly Estimate Required Resources

Calculating required resources must rely on realistic market prices and a detailed budget breakdown. Experts recommend dividing the total sum into logical components, such as capital expenditures (CAPEX) and operating expenses (OPEX).

A vital part of this calculation is a financial reserve. Projects frequently encounter unexpected expenditures, inflation, or project delays. Therefore, the required resources should incorporate a buffer to cover these risks, typically set at 10% to 15% of the total budget.

Common Misconceptions and Confusions

In practice, several common misunderstandings arise. The most frequent is confusing required resources with available resources. While required resources represent the ideal state needed for implementation, available resources are the capital a company currently has on hand. The gap between them constitutes the funding deficit that must be covered from external sources.

In grant projects, required resources are also frequently confused with eligible costs. The overall required resources for a project may include expenditures that the subsidy scheme does not cover (ineligible costs). Budgets and funding applications must strictly separate these two categories.