How much does a web project actually cost in Australia? Is it a public facing website intended for promotional use? Or is it a custom built web application that streamlines you business workflow? Either way, estimating the cost is something you need to get right.
Firstly, Web Development Agencies should be transparent with their project costs. Estimating projects accurately is something that suppliers should take very seriously as ultimately they share mutual goals with the client in the long run.
Client relationships need to stretch beyond pure business needs, and must be valued higher than anything else in your business.
If you overshoot the project cost and supply a figure that is inflated and inaccurate, you are likely to lose credibility from your client and they may look elsewhere for their wev developers.
On the other hand, if you underquote the costs, then your business is left high and dry.
So how do you ensure you get a project cost estimate in the correct ballpark? Simple. Follow the 8 simple rules below.
1: Previous Work On Similar Project
Put simply, this entails previous features worked on for the same project type, and how accurate the scope was based on the reality of what was ultimately delivered.
Comparing the features of the new project with any other similar projects you have completed in the past will be a major contributor to accurately estimating costs.
It helps if this includes work done for the same client as you have existing experience on how they approach and manage projects.
Go back and look at that previous work completed and also revisit any of your prior estimates.
Ask yourself how accurate did this turn out to be? Adjust your figure for the new project accordingly.
2: Technical Skills Required
Technical proficiency required to fulfil the project requirements. How common or rare is this skillset?
This takes into account the cost of hiring individual expertise if contract workers or full time internal employees were to undertake the development as an alternative.
Do some numbers around what the market value for each expertise required is and the estimated effort. This will give you a firm number to reference against your cost proposal.
3: Time Needed For Each Feature
A general overview of each feature and the effort in hours / days required to complete these to the highest possible standard of quality.
Internally you must examine at a high level each feature and some of the implications involved in getting them delivered. At the end of each examination, you will have a better idea at how long each will take to complete.
4: Opportunity Cost
The time commitment to the project required versus the opportunity cost of competing work in the market.
5: What The Competition Costs
Historical costs of similar projects that competitors would estimate - you can subtract substantially as a result of not requiring added layers of internal structure to complete projects (ie account managers, mid level managers, marketing resources, junior and mid level development resources, business developers, accounts) to become more competitive with costs.
6: Business Growth
A small percentage (10%) factored into business growth and sustainability.
7: Hourly Rate Calculation
Hourly rate of work required to fulfil all outcomes over the project timeline.
8: Business Costs
General business resourcing costs such as office space, hardware, software, people and equipment.
