What is a link budget, and how is it calculated?

A link budget is the addition that works out how many dBm of the power leaving the transmitter reaches the receiver: received power = transmitter power + transmitter antenna gain - cable loss - FSPL - obstacle loss + receiver antenna gain. As long as the result stays above the receiver sensitivity the link is established; the difference in between is the fade margin, and leaving 10-20 dB in the field is common practice.

Let us look at a concrete example. Take a remote control giving 10 mW ERP (10 dBm) at 433 MHz, working over 150 m in the open:

Total received power comes out at roughly -58.9 dBm. Since a typical FSK receiver has sensitivity in the -125 to -130 dBm range, on paper there is more than 65 dB of margin. If despite this the link drops at 150 m in the field, the items not written into the budget are at work: a rising noise floor, obstruction of the Fresnel zone, polarisation mismatch (20-30 dB in practice at 90 degrees), an antenna inside a metal enclosure and multipath fading.

This is why a link budget is not a guarantee but a diagnostic tool. When you get shorter range than expected, go through the items one by one: which line is eating 20 dB? The answer is usually in antenna placement, not in transmitter power.

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