[thelist] Fixed Cost Estimations

Randal Rust randalrust at gmail.com
Thu Jul 21 07:25:06 CDT 2011

On Thu, Jul 21, 2011 at 8:15 AM, Fred Jones <fredthejonester at gmail.com> wrote:

> Anyhow, I think everyone knows about the "Cone of Uncertainty" which
> means that my estimate today, before the job begins, is up to 4x off.

We bid all projects with a budget that is based on three things:

1. Licensing fees, if applicable.
2. Hours to configure per the client's needs, plus project management, etc.
3. 5-15% contingency.

> I have someone just now who is asking about a fixed fee for a site
> rebuild. I told her that I would *probably* be willing to do it for 4
> times my estimate.

You have to give her a number that is reasonable and fair, first and
foremost, to you. If you really need the work, then you give her a
lower number. If you think it's going to be a real hassle, but would
still like to do the job, give her a higher number.

We do everything by hours, and we track time on every project. On some
projects, you lose, on some you win. But in the end, you manage
everything towards a net gain.

Randal Rust
R.Squared Communications

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