35 year old unemployed man, crossing the river by feeling the stones without any connections or clients. Since starting my business 8 months ago, I have completed my initial accumulation and have now transitioned from an individual to a team. Today's topic for sharing is "How to estimate costs when taking orders, by project or by time"
After 8 months of entrepreneurship and serving over 20 clients, the most concerning issues for clients are time and cost. Each programmer sets their own price, and clients have different expectations. Therefore, how to price has become the key to whether the project can be successfully completed? Based on my experience, this question can be divided into several stages
Early stage of entrepreneurship
The so-called early stage of entrepreneurship is easy to understand, which is the first stage when we open the door to welcome customers. As the saying goes, everything is ready except for Dongfeng (customer orders). At this time, without negotiation experience and brand influence, it is not easy to receive customer inquiries. If the unit price is not too low, my suggestion is to take on as many as possible. Only by achieving a breakthrough of 0 can we have the opportunity to review gains and losses.
Mid term entrepreneurship
After a period of polishing and accumulation, we have gained some negotiation experience and our negotiation skills have become quite mature. At this point, we need to review the past: whether the income has met expectations?
1. If it does not meet expectations, is it due to project time or cost?
2. If it basically meets expectations, should we continue to explore further?
Entrepreneurship is a one-way street, there is no best, only better. After achieving a stage goal, we must explore upwards. Only in this way can we go from 0 to 1, from 1 to 2, from 2 to N, and complete the transformation from small to large.
Mature stage of entrepreneurship
In the previous stage, I did not introduce the specifications of the docking order because I felt that stage was mainly used for review. Only in the third stage of entrepreneurship is the real time for change and innovation, because at this time our negotiation skills and project cost (mainly time) estimation have reached a stable output stage.
1. Small project, workload within 10 days. The actual cost of the project is obtained by multiplying the minimum unit priced by the development cycle of the project, and then adjusting the acceptance time.
With relatively accurate time and cost, the probability of successful negotiation is generally above 80%.
2. For medium to large-scale projects, it is recommended to estimate according to the project. After working on so many projects, I found that there are only a few factors that affect project progress:
2.1 Whether the estimation of development time is accurate depends on the project manager's understanding of the implementation personnel and the judgment of the project's potential risks;
2.2 Communication costs: Every project requires a lot of communication from initial project initiation, development, to acceptance. This cost is difficult to estimate and grasp. My experience is to conduct acceptance in stages and minimize this cost as much as possible. Generally, it accounts for 10-20% of the development time;
2.3 Team management is also important. Working depends on people, and doing this job well requires reliable people. After forming a team, I realized why some big shots only focus on the team when investing, and even invest in people they are familiar with. They must have stepped into many pitfalls and paid a lot of tuition fees to gain experience.
Overall, small projects have a short duration, few participants, and are quick and straightforward. Directly using time to estimate is unlikely to cause any problems. Large projects not only need to consider research and development costs, but also various risks. They must be evaluated using project management principles, otherwise they will either not make money or suffer direct losses in the end.
