9 Crucial Hacks for Making Comprehensive Project Estimates

Relationships between clients and freelancers need to be nurtured and improved all the time. If they have respect for one another, it will be easier for them to maintain a successful business collaboration.

The crucial precondition for establishing smooth cooperation is gaining mutual trust.

For instance, if you’re a client who wants to find a reliable employee or a freelancer, you need to meet the agreed terms of your collaboration. Similarly, freelancers should also follow the rules they negotiated with their clients. At this, initial point of every business relationship, it’s vital for both interested parties not to miscalculate the project estimate.

Changing financial or any other conditions in the middle (a less painful scenario) or at the end of a project (a worse option) could result in a misunderstanding and disappointment of both parties.

To avoid such an outcome, every freelancer and client should devise their unique way of forming their project estimates. For starters, you can use some practical, general features and adapt them to your individual business needs. Therefore, read the following guidelines and learn how to come up with an accurate professional estimate.

Communicate with the client

The most important thing to do when it comes to the creation of an estimate is getting as many directions from the client as possible. You should use the period before you start working on the project to ask them any single question that crosses your mind. This communication should consist of the following points:

  • Have an ice-breaker conversation – Many businesspeople and freelancers find written communication easier than speaking, especially if they communicate in a foreign language. Still, even if your initial contact was made via email or a freelancing platform, you’ll learn more about the client’s expectations if you hold a live conversation via Skype or any other platform. Prepare all the questions and note down everything your client tells you during this interview.
  • Do the follow-up –Write to them (or call them if you like it more) after you’ve analyzed all the points discussed during the conversation. This follow-up will clarify any unclear directions about the tasks in the project. All those parts will be important when bringing an estimate for your project. Also, it will be the third time you’ve contacted your client, so it should generate a higher level of trust and understanding.
  • Insist on milestones –Breaking down the project into several milestones will yield multifold benefits. For starters, you’ll get a chance to regularly check whether or not you’re doing the right thing. Moreover, your client will have a chance to intervene if they don’t like any details in your work. Finally, they’ll keep you disciplined and force you to do your tasks on time, so as not to miss the deadline and avoid the potential penalties.

To conclude, the more you communicate with your client in the preparatory period, the lower is the risk of going the wrong way, in terms of the creative part of the project.

Calculate the time

Time isn’t only money. The way you manage the time necessary to finish your business tasks will affect the relationships you have with both your clients and your colleagues. Because of that, you need to offer your client a precise time estimate of the project in question.

If you’ve never done such a demanding or large project, think twice before you accept it in the first place. Quitting once you’ve already started working isn’t an option.

Now, if you decide to take the project, calculate how many hours a day you can work effectively. For instance, some experiments have shown that a six-hour work day brings out the best in workers. A successfully planned and finished project will contain a balanced combination of work and rest. In line with this, if you realize that you’ll have to work 50+ hours a week on that project, expand the period you need for the work to be done.

In line with this, if you realize that you’ll have to work 50+ hours a week on that project, expand the period you need for the work to be done.

On the other hand, if the client doesn’t agree with the new deadline, start thinking about outsourcing some of the workload. However, bear in mind that all these time-related terms and negotiations should be done before you start working on the project.

Invite additional staff

Nowadays, everything is about team work. A lone-wolf freelancer will eventually get lost in the wilderness of the modern business world. Unless you want to burn out and ruin the chance to make a significant business result, you have to form a team of colleagues.

Nevertheless, be aware that they’ll cause certain changes to the estimate you’re going to present to your client. Here’s where you should apply some managerial skills.

On the one side, you mustn’t overpay those outsourcers. On the other, don’t underestimate their work. If they fail to live up to the expected standards, your reputation will be at risk, as well as the entire project.

Furthermore, your associates on the project shouldn’t be offered the same hourly rates as you. In this case, you’re the leader of the pack and it has to be visible in every aspect of your work organization. Your responsibility is much higher than theirs, so bear that in mind when forming their hourly rates.

Ask for second opinion(s)

Even when you can handle a project completely on your own, it’s wise to ask a colleague or a consultant to take a look at your rates and the entire estimate. This becomes an even more important part of estimate forming if you’re a beginner freelancer.

On the other hand, working with outsourcers makes this an inevitable step in making a precise estimate. Therefore, sit down with your collaborators and hold a brain-storming session. Listen to their opinions on the rates and the conditions offered to the client. After all, they’re a part of this project and you should appreciate their opinions, as well.

What’s more, their attitude should also be taken into consideration when it comes to the deadline. Before you conclude the estimate, ask your co-workers to hand in their personal estimates to you. When you collect all of them, it will be easier for you to put together the overall estimate of the entire team.

Offer fair hourly rates

Everybody rocking in the free(lancing) world had at least once a dilemma whether they should apply hourly rates or charge the entire project they were working on. It’s impossible to give a one-size-fits-all solution here, since hourly rates vary from profession to profession.

Nonetheless, when making an estimate for a particular business project, the most logical thing to do is categorize that project. It can either be a long-term endeavor or a short-term one. In the first case, you’ll have to adapt your hourly rates.

As a matter of fact, it’s smarter to go with an all-inclusive price in this case. For instance, creating a website from scratch may last for weeks and take dozens of hours. Similarly, writing an impactful story for a newspaper may take months. In these cases, hourly rates aren’t a reasonable way of charging your clients.

On the contrary to that, opting for hourly rates is a better solution when setting prices for short-term projects. Still, don’t overdo with those rates if you want to get a project. Ask your colleagues about their hourly rates and offer similar prices to your clients. Going too low or too high will leave you jobless and that’s the last thing you want.

Cover the direct costs

Holy trinity of every estimate when it comes to costs are manpower, travel expenses, and materials. Click To Tweet

If you need to hire additional employees or outsourcers, each and every hour of their work should be included in your estimate.

Similarly, when a project is such that it requires traveling, don’t forget to add those expenses to your estimate. However, it would be bad for the business if you go on business trips that haven’t been discussed with the client. This is where the aforementioned milestones will come in handy –you’ll be able to discuss the traveling needs with your client. Simply put, if they’re not willing to pay the travel expenses, you shouldn’t go on such journeys.

Finally, when it comes to materials, they don’t necessarily have to be iron, rubber or plastic. In the modern world, business trends are different in terms of resources. That way, today you can consider cloud storage space a resource that’s crucial for a project to be done properly. So, make sure you bring up such details in the interviews and meetings with your clients. That’s the only way you’ll be able to add them to your estimates.

Include all overhead expenses

Your project estimate will have to contain all the overhead expenses your business is going to have while working on that project. They include all the office and work-related costs incurred by it. For instance, if you’re a software developer or a translator, you’ll be using your computer, the Internet and your office during the project. A developer has greater demands in terms of the Internet speed and other tech features.

In addition to that, don’t forget to add the office rent to the estimate. Similarly, the electricity and the heating/cooling shouldn’t be left out. Also, if you add some additional workers to that project, those expenses will increase. Only when all those features are included in your estimate should you send it to your client.

Prepare for the unexpected

Sometimes you can’t control some variables of the project. For instance, you might come down with flu and stay away from the desk for days. Also, such things might happen to your partners or outsourcers.

Unfortunately, some clients won’t take into consideration these situations.

Because of that, you need to protect yourself in advance. This means that your estimate should contain a special part dealing with such matters. The key feature here is ensuring enough time for your tasks in case of emergency. For instance, you could include an appendix that says you have a right to postpone the deadline in case of any objective reasons, such as diseases, family issues or other serious causes.

This is also where a special clause about finishing the project earlier than agreed could be added. If you manage to do that, you could suggest that the client pays you an extra bonus. Of course, if your client doesn’t agree with such suggestions, you’ll have to change the estimate.

Nevertheless, don’t hesitate to negotiate some terms that will protect you from any unexpected issues.

Provide solutions for problems

As shown in the previous paragraph, some problems can be anticipated. It’s important to be aware of them in advance and prepare proper solutions beforehand. However, sometimes clients refuse the estimate even when it contains only the basic expenses. If you can live without that project and that client, you should simply move on.

But what to do if the client doesn’t approve of some of the parts of the estimate and you desperately need that project?

First of all, you’ll have to cut some of the expenses. For instance, think about working from shared space, rather than hiring an entire office. Also, if you can work from home, it would reduce the expenses dramatically. Moreover, if other people working with you on the project can do the same, you will be able to come up with an estimate that will satisfy your client and ensure higher rates for you and your team.

Finally, if the client has some doubts about hiring other people to work on the project, show that you understand their concerns. You’ll do that by including them in the recruitment process. By doing so, you’ll prove your loyalty and gain more trust. What’s more, you’ll reduce the amount of stress induced by this process, since you’ll both be responsible for hiring additional staff. Apart from that, the client will get an insight in the rates on the market, which will lead to faster adoption of your estimate.

It’s never easy to start working on a new project. Every client has their special requirements and work methods. What is crucial at every new beginning is gathering as much information as possible about the client, their business and the project.

When you have all the necessary data, you’ll be able to calculate the time, the resources and the staff you’re going to need for that particular purpose. An estimate that contains all these features will ensure that your share of work is done on time and in accordance with your client’s demands.

Mark Thomasson
Mark is a biz-dev hero at Invoicebus - a simple invoicing service that gets your invoices paid faster. He passionately blogs on topics that help small biz owners succeed in their business. He is also a lifelong learner who practices mindfulness and enjoys long walks in nature more than anything else.
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