Project estimates are important in just about every industry. Regardless of what type of project you're taking on for a client or business associate, things will go infinitely smoother when you can accurately predict the cost of time and resources.
Without a reliable estimate, multiple problems can arise. If you undershoot your prediction, you might find yourself coming up short on time or resources. Then, you'll have two choices, and neither of them is pleasant; you'll have to suck it up and find a way to make the project work, or you'll need to make the dreaded call requesting an increase in funds or allotted time.
If you're able to create an accurate estimate beforehand, though, you'll greatly reduce the number of issues that can arise. Here, we'll go over a few helpful tips for ensuring that your estimate is as close to perfect as possible.
In this article, we will cover:
1. What Is Project Estimation and Why Is It Important?
2. What Should Go Into Your Estimate?
3. Estimating Monetary Cost
4. Estimating Time
5. Estimating Resources
When you're working through the early stages of a new project, it's imperative to have a plan. Part of that plan is knowing what will be needed to complete the project to the client's satisfaction. Essentially, an estimate is an overall calculation of what the project will require in terms of time, effort, and resources.
"Estimation is an essential part of planning. It prevents your expectations from getting too high or too low and enables you to make work more organized for your entire team."
With an accurate project estimate, you'll not only know what you need to charge the client to get the work done, but you'll also ensure that they have reasonable expectations. If the client has an accurate picture from the start in terms of how long a project will take, the process will be much less stressful for everyone involved.
An accurate estimate also helps when you're working collaboratively on a project. If another party is providing resources for the project, they'll need to know what will be required ahead of time.
Do you want to create a complete and accurate project estimate? There are several variables to keep in mind. Ensuring that your project estimate is accurate entails far more than just giving a project a once-over and slapping a dollar amount on it. Typically, you should include the following three categories in every comprehensive project estimate: monetary cost, time, and resources.
At least for the client, predicting monetary cost is probably the most important part of any project estimate. Once you've determined how much the project will cost end-to-end, you can figure out how much to charge the client.
"The costs incurred by your project are direct costs. If your project is to build a robot, then the direct costs consist of the cost of buying tools and parts, hiring a robot specialist and a programmer, for instance."
To accurately estimate the monetary costs of a project, you must determine the following:
When calculating these costs, it's usually wise to overestimate slightly, as it's better to finish with a surplus than to come up short.
Accurately predicting the amount of time needed for a project will go a long way towards preserving your sanity. Not only will it allow you to allot the time you need to complete the project, but it will also help you determine a fair price and accurate timeframe for the client.
There are several ways to predict the time needed for a project, but one very effective route is to break the project down into smaller tasks and essentially add them up, known as the "bottom-up" approach. In most cases, it's far easier to predict how long a small task will take than a giant project, and the bottom-up approach also helps you take things one step at a time once you get started.
When estimating the resources needed for a project, there are several factors to consider, including materials, equipment, workspaces, and people. If you're working with other project stakeholders or an employer who will be supplying the resources for the project, they're going to want accurate resource estimates ahead of time. Additionally, the number of resources will play into the overall monetary cost of the project and what you'll need to charge the client.
There's no foolproof way to ensure that your resource estimation is perfect. There may be a snag or speedbump along the way that requires extra help or materials, and when that happens, all you can do is roll with it. However, taking the time to plan and get a more accurate estimate right from the start will prevent a lot of stress and hassle during the project.
If you've broken down the project into smaller tasks for your time estimation, you'll want to examine those tasks once again to determine the needed resources. For each section of the project, try to predict what tools will be required, how many people it will take to complete, the materials needed, etc. Once again, overshooting the estimate will likely be better than undershooting it.
Estimates are a crucial part of any project. Creating clear and accurate project estimates will not only save you time and money, but they will make you look professional and competent. Ultimately, the key to creating an accurate project estimate is thoroughness. If you take the time to look at the project from all angles and consider the variables, you should be in good shape. When estimates are inaccurate, it is usually because you rushed and overlooked crucial details
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