How to estimate high level/rough budget costs for a project ?

[Kapil]

hi,

There are usually some clients who asks us to do "high level cost
analysis" for the project based on some URLs they share. for eg : "We
are looking to develop an application similar to .com and .com."

1. How to estimate high level/rough budget/ballpark/budget range of
these kinds of projects ? And, how to communicate these costs to the
client ?

2. Should we break the project down into the detail ? It would
require almost as much as work as the "paid for " requirements
gathering phase.

3. What if the client requires the high level estimate in next 48
hours ?

4. "What if you spend hours or days putting together this ball park
quote, breaking the project down perfectly, and then don’t win the
work." Is your effort wasted ? Is this a wrong approach ?

According to this blog post ,
http://www.thesambarnes.com/web-project-management/web-project-management/estimating-time-for-web-projects-more-accurately-part-2/

"After all, if you get a new business lead, spend three days
estimating and deliver a proposal worth £30,000 only to hear that the
client ‘appreciates your response’ but only has £3000 to spend, you
probably deserve to be struck with reasonable force in the baby-making
department."

Any ideas will be really helpful.

Thanks,
Kapil Bhatia
www.Vinsol.com
+1.415.6709514

[Damien Tanner]

Hey Kapil,

Over the years I've tried many things and arrived at a process which
seems to satisfy most.

When we're first contacted by a client they typically just send a
short email saying 'we need something built'. Depending on the amount
of info they send over I usually ask them for any docs, designs or
specs they already have prepared. Unless they're a large well known
company who obviously have an idea of a realistic budget already, I
usually ask them right then if they have a budget in mind or
expectations for the cost.

At this point if they have wildly different budget expectations I will
recommend them to another company who maybe be able to help them out.

Next I arrange a quick introduction call with them, I find this is
very useful for getting a feel for what kind of client they are. After
reading the details they send over and having a chat I usually send
them a rough estimate which is accurate to within 1 month (most of our
projects are 3 to 6 months). How I do this is look at our previous
projects and use my experience to estimate how long this type of
project might take. If this is within their expectations, we then
proceed to a move involved estimation process which takes around a
day.

We find this is a good balance and most of the time the day doing the
detailed estimate does not go to waste.

Kind Regards,
Damien Tanner
Co-Founder and Director, New Bamboo

Creating fresh, flexible and fast-growing web applications is our passion.

3rd Floor, Gensurco House, 46A Rosebery Avenue, London, EC1R 4RP

+44 (0)78 6312 7999
+44 (0)20 7099 7486
http://www.new-bamboo.co.uk

[Jason Green]

Hey Damien,

Thats good advice!

The estimate you give them after the 1 day planning, is that a fixed
price range or merely an estimate?
About half the projects we take on here have pretty tight budgets, and
tend to be within a specific domain which makes it hard to really give
a good estimate. I have tried turning this on its head and opting for
an agile 2 week iteration process rather than the usual 1/3rd up front
1/3rd at milestone 1/3rd (+ extras) on delivery, but clients seem to
not all favour this approach.



Jason Green

Dynamic50 Web Design and Development

Tel: +44 (0)845 409 1403
Mob: +44 (0)7850 732812
Skype: dynamic50.com
Twitter: thefiftygroup
Email: jason...@dynamic50.com
Web: http://www.dynamic50.com

Dynamic50 is part of The Fifty Group. The Fifty Group covers a wide
range of specialities including Web Design and Development, Search and
Selection, Web Production, Video production and Hosting. See http://www.thefiftygroup.com

*** DISCLAIMER ***
This message and any attachments are confidential, and may be
protected by legal privilege. If this has been sent to you in error
please contact the sender as soon as possible.

Dynamic50 Ltd is a limited company, registered in England and Wales,
registered number 06468278, VAT 938499753.

[Damien Tanner]

Hi Jason,

We are all about scrum, kanban and all that goodness. So the 1 days is
actually a 1/2 day user stories workshop, followed by a 1/2 day
planning poker session with the dev team. The output is a spreadsheet
with estimates (be it days, hours or points) for each story. Whether
or not your going to do a fixed or t&m project, the reality is all you
will only have is an estimate! The best I think you can do is add a
contingency budget/amount on to projects which are done for a fixed
cost/time/features whatever.

I will add though - a fixed project is a really not a good option for
both sides.

Kind Regards,
Damien Tanner
Co-Founder and Director, New Bamboo

Creating fresh, flexible and fast-growing web applications is our passion.

3rd Floor, Gensurco House, 46A Rosebery Avenue, London, EC1R 4RP

+44 (0)78 6312 7999
+44 (0)20 7099 7486
http://www.new-bamboo.co.uk

[Matt Jankowski]

[Paul Pagel]

We will spend a little time trying to do the PERT(http://en.wikipedia.org/wiki/Program_Evaluation_and_Review_Technique).  It will give us a range of numbers to tell the client which are usually initially  accurate.  However, once the project starts, we need to keep it up to date so the customer can understand how changing the scope effects the numbers.  For us, any in depth estimating up front for a project has been a negative experience.  We can do broad estimates, but without domain knowledge that comes through working on the project, that is as accurate as we can get. 

Paul Pagel

www.8thlight.com