As a Project Manager, a nightmare scenario to find yourself in is to have the client believe that your estimates are set in stone and will be the actual cost of the project or the exact date of delivery. Whilst, of course, you will set out to achieve those things – it is unrealistic of the client to hold such expectations. So, the first point in a guide to estimating has to be that – an estimate is just an estimate, something you must convey to the client especially if the client has never previously employed a Project Manager.
The estimate and the client.
A fair question to ask then is just how do you get across to the client that the estimate is an approximation of costs and dates – without leaving them thinking that you cannot control the project? The answer here is somewhat dependent on the amount of time you have to draw up the estimates. The longer you have the more accurate your estimates should be as you will have more time to consult with other staff/experts on what is required. If time is tight for you – then always err on the side of caution and quote the upper end of the estimate(s). The client might not like this initially, but if you then bring the project in under budget and/or ahead of the planned date – then they will be far more thankful than if the reverse were to occur.
Producing the estimate.
So, the next trick is to know how to produce an estimate that is favorable to you – but that the client will be willing to accept:
– Break down all resources costs according to the capital and operating expenditure and all staff payments according to each individual job role.
– Get separate estimates for every single aspect of the job, breaking it down into the smallest possible set of tasks.
– Then, also, produce a summary of the estimates – that have the headline figures for the various aspects of the project.
– Before presenting the estimates to the client – look to see if there’s a better alternative way of arriving at an estimate and then re-check all your work.