Historically the planning phase often ends up taking somewhere between 7.5% – 12% of what the product costs to build.
How Accurate is a Detailed Estimate?
It can be very accurate depending on how thorough a job is done in the planning phase. The final costs can be within a very acceptable margin of error of 0%-15%.
Why You Should Get a Detailed Estimate
If you’re very risk averse and are on a shoestring budget, then you should be looking toward creating a detailed estimate. This will allow you to:
- Get more accurate cost information.
- Reduce misunderstandings with your developer.
- Reduce project risks.
- Eliminate constant upsets between customer and vendor.
- Prevent a launch date that keeps getting pushed out.
A startup on a shoestring budget can’t afford setbacks, cost overruns and do-overs. Our detailed estimate approach is a proven method that has worked for more than a decade on simple to complex digital products and is used in many other industries, such as building homes and in the manufacturing of almost all products.
3) Flexible Estimate
The Most Common Approach
The third type of estimate that we use is called a “flexible estimate”. This is the most common approach to estimating and building complex software, especially for projects in the 500+ hour range.
In a flexible estimate we do a rapid planning session that takes around 1-3 days to complete and costs around $1,000-$3,000. During this we rapidly document out the site’s core features. Then we have our developers assemble an estimated cost range by estimating the complexity of each of the main system components. This is far more accurate than a ballpark estimate but less accurate than a Detailed Estimate. We go over the estimate with you and describe our product assumptions, areas of risk and our vision.
An Organized, Tightly Controlled Approach
If the estimate is acceptable, we proceed directly into development in a very organized manner. The product will be built incrementally, little by little. Each week we decide what will be built over the next two weeks. At the end of two weeks we have a show-and-tell to showcase what was built. This provides transparency and accountability on a regular basis, to assure nothing gets off track and the budget can be watched and measured week by week.
Maximum Control
With a flexible estimate we dive quicker into development and week by week we build upon the previous week’s work. Since new code is delivered every 2 weeks, you will be able to provide a lot of input and guidance about what was built, which helps steer the product to your desired result. During these weekly meetings, you can remove, modify or add new features at any time. You can control the budget by specifying what you want built and what you don’t. Features can be put on hold or skipped. As we proceed with weekly meetings both the customer and vendor build a tight bond, where both parties are working toward the same goals.
This flexible approach is the way most software is built in Silicon Valley. It is an ideal approach in that you only pay for the work that is completed and can change the scope of work at any time. The focus is on building a minimum viable product and getting it into the marketplace quickly for customer feedback.
Quick to Start
We prefer this method because it allows development to begin quickly and it acknowledges the fact that it’s almost impossible to plan for every contingency up front, no matter how hard you try. It’s the most fair because you only pay for what gets built and the teams have a mutual interest in staying closely integrated and committed to the process. Both parties respect one another’s time and effort and there is a maximum push towards efficiency.
Which Type of Estimate is Best for You?
Many times the best approach is the one that matches your personality.
If you just want to get a rough idea …
If you have an idea and you’re just trying to find out if it’s viable and what it might cost, then a ballpark estimate might be okay initially. That will give you a sense of what you’re up against and whether or not you can reasonably pursue the project. If you decide that the ballpark estimate is in an acceptable price range, then you can go to the next step and either do a Product Specification or proceed with the project with a flexible estimate.
If you’re a very detailed oriented person …
If you’re a very detailed oriented person and risk-averse, then a detailed estimate is probably right for you. The time invested upfront in planning, minimizes almost all of the downstream financial and project risks. The only potential downside for some is that you spend a lot more time upfront in planning, which from our experience works best with very detail oriented people. The time in planning provides new insights and gives you an opportunity to discuss your product with an experienced team who can provide valuable feedback. It also allows you to know within a tight margin of error, what your expected costs will be.
If you’re not a “details person”…
If you’re not a “details person” or you’re much more action oriented, then a flexible estimate is the best approach for you. This allows you to get right into development and start seeing your product be built immediately. Our experienced team will guide you and seek to minimize your costs at every turn. As you see the app come to life, you might change course on some features, add new features or even decide to put some features on hold. You’ll be fully in control and you won’t be committed to any particular scope of work.
Let’s Work On Your Estimate!
Whether you want a ballpark estimate, detailed estimate or flexible estimate, ClearTech Interactive can work with you to meet your project needs. We offer all three types of estimates and work with you to find the right fit for you.
You can request a call or contact us at 727-562-5161 to find out more about our estimates, our process, and what we can do for you.
