Costing quotes

Having been in business since 1997 - where does the time go?! - I have found that costing client work for a quote is a very tricky business to get even roughly right. What eventually enabled me to get more accurate in this took two or three years to get my head around.

I always used to carefully work out how long everything would take, then quote on those hours. However, I learned very quickly that I was far too positive about how long everything would take, and under-estimated by 50%. So instead I simply carefully worked out how long everything would take (just as carefully), then doubled it.

That was better, but I wasn't thinking big enough. Over time, I analysed jobs, and realised that I was still off by 50% on base with quotes. I had to treble my estimates, and then was pretty much coming in on target. While I use some technology tools to help me, the main thing that I needed to learn was that I needed to assume that I would be off by a factor of 3.

I go so far as to block out the work hours I intend in my diary, so the time is concrete. I can check if tasks are over or under, and bill the hours through to the client. Everything for me is based around my diary.

We want to do the best for our clients, and provide value for money. But we have to check that our work can be delivered in the hours that we have allocated. Over time, scheduling and estimating work never really gets easier, but if we keep measuring, we will get better over time.


Sam