5 Replies - 1759 Views - Last Post: 10 September 2014 - 07:51 PM

#1 ryantechnerd  Icon User is offline

  • New D.I.C Head

Reputation: 0
  • View blog
  • Posts: 1
  • Joined: 09-September 14

How to estimate software development cost and charges?

Posted 09 September 2014 - 05:22 AM

Me and my friend set up a software company recently,
and my first project is to develop a software for my friend's company,
the project was estimated to be completed in 1 month,
but I took 3 months to complete the project.
After reviewed my project development progress,
I realize that root cause is due to I didn't analyze the project in detail,
so I only estimate total man hour required base on
project main features instead of detail functions.

Few days ago, he gave me another project, and this time I wanted to
analyze the project in detail before I start to estimate total man hour required,
but when I look at the requirement specification, I think it will take me
2 to 3 weeks just to analyze the project. I can charge the analysis fee
because my friend is the shareholder.

If I get a project from a customer, and if the project may take
me 2 to 3 weeks to analyze the project in detail, how can I charge my
customer for the detail analysis?

In current Software Development market, software company can not start project
before customer agree on the estimated man hour. If I do not take 3 weeks to
analyze a project in detail, I may end up with losing money due to under
estimate the project. If I take 3 weeks to analyze a project in detail,
but the customer think the project is too expensive,
and do not want to proceed, my time will be wasted.

Is This A Good Question/Topic? 0
  • +

Replies To: How to estimate software development cost and charges?

#2 tlhIn`toq  Icon User is offline

  • Xamarin Cert. Dev.
  • member icon

Reputation: 6505
  • View blog
  • Posts: 14,360
  • Joined: 02-June 10

Re: How to estimate software development cost and charges?

Posted 09 September 2014 - 05:42 AM

Welcome to freelancing. You've done a good job of summarizing the reality of it. Rookies always jump in and think they can charge $20/hour and come out great. Then they realize there is 1000 hours in setting up the website, and 20 hours for doing accounting, and 500 hours for making sales presentations. By the time they are done with the work of running a business, before writing their first line of code, they have 5,000 hours of time unpaid for.

Yes, your time for creating the estimate will be unpaid. That's part of the overhead, just like cost of software development tools and electricity. Its not possible to run a business with no overhead. Whenever *you* ask for an estimate you don't expect to pay for it, do you? When the plumber comes out and spends 2 hours looking over your property and writes it up. Or when the house painter spends 90 minutes plus driving time just to tell you what he thinks it will cost to paint your house. You expect them to give you estimates for free. Your work is no different.

I would say you need to get faster at estimating. No magic pill here. You just need to be able to estimate the work in under 120 hours. That is a LOT of man-hours for doing an estimate. Maybe you're being too pedantic in trying to be accurate to the minute for every radio button and textbox. Maybe you're not leaving yourself enough leeway for feature-creep and the client adding in things or for things to go wrong. Maybe you just need to look at the broad strokes of the project and increase your estimate by a factor of 4 to account for all the little things.

This post has been edited by tlhIn`toq: 11 September 2014 - 07:07 AM

Was This Post Helpful? 4
  • +
  • -

#3 modi123_1  Icon User is offline

  • Suitor #2
  • member icon



Reputation: 13400
  • View blog
  • Posts: 53,478
  • Joined: 12-June 08

Re: How to estimate software development cost and charges?

Posted 09 September 2014 - 07:35 AM

I agree with tlhin.. I may throwing in that perhaps charge an upfront retainer, though I doubt many will go with that. (I know I certainly wouldn't).

Quote

If I get a project from a customer, and if the project may take
me 2 to 3 weeks to analyze the project in detail, how can I charge my
customer for the detail analysis?


What sort of project are you doing that is taking you three weeks to analyze? Three weeks, forty hours per week, and you are sitting at 120 hours to analyze a project?! That seems awfully high. Like ridiculously high.
Was This Post Helpful? 1
  • +
  • -

#4 DarenR  Icon User is offline

  • D.I.C Lover

Reputation: 592
  • View blog
  • Posts: 3,823
  • Joined: 12-January 10

Re: How to estimate software development cost and charges?

Posted 09 September 2014 - 08:11 AM

he may be tossing analyzing the entire code set-- which really isnt analyzing but in depth research.
Was This Post Helpful? 0
  • +
  • -

#5 baavgai  Icon User is offline

  • Dreaming Coder
  • member icon


Reputation: 6966
  • View blog
  • Posts: 14,572
  • Joined: 16-October 07

Re: How to estimate software development cost and charges?

Posted 09 September 2014 - 10:02 AM

First, call an estimate what it is: a guess. Your guessing will get better with experience, but it will always be just an educated guess.

Estimate high, double or triple it, because that's likely to be closer to reality than what you currently see. If you get it done faster, everyone is happy. If it takes longer and costs more, no one is happy.

The lowest level of detail in software development is actually programming the thing. There are details that will come out at this level that no one will see going in. Analyzing as if you work programming is doing twice the work with half the accuracy, which it sounds like you're doing if you're taking that long.

Set milestones. Don't try to do everything at once. The more you can break up a project into pieces the better off you'll be. Also, if you can show the customer something, anything, early on, you have a better chance of foreseeing some roadblocks the customer themselves are likely to throw at you.

Once you have a plan, nail down the deliverables and keep on point. Do NOT let the customer change what they've agreed on without them also acknowledging they've changed the time table. If the customer decides the don't need something, and want less work, don't let them pretend that conversation never happened. Document everything. Every important dialog should also be encapsulated in an email trail.
Was This Post Helpful? 2
  • +
  • -

#6 astonecipher  Icon User is offline

  • Too busy for this
  • member icon

Reputation: 2329
  • View blog
  • Posts: 9,356
  • Joined: 03-December 12

Re: How to estimate software development cost and charges?

Posted 10 September 2014 - 07:51 PM

Welcome to the hard part. Although, from the sound of it you are putting too much emphasis on it. My company can spin a proposal out between 24 hours to 1 week, depending on how complex the initial findings goes. From there, and only on complex systems, we conduct feasibility studies.

My advice, keep a journal of sorts. Keep track of how long it takes you to write certain functions (keep them abstract and use them again as well). This will give you some idea of billable time.

This post has been edited by astonecipher: 10 September 2014 - 07:51 PM

Was This Post Helpful? 1
  • +
  • -

Page 1 of 1