Understanding the Three Types of Estimates

If you have an idea for a web or mobile app development project, one of the first things on your mind might be, “How much will it cost?”

Based on almost 2 decades of experience, we can tell you that this question is not that easy to answer accurately without investing a lot of time upfront.

How much it costs to build a mobile app is highly dependent on the nature and complexity of the app. To answer the perpetual question about costs, we offer three kinds of estimates with varying degrees of accuracy.

1. A Ballpark Estimate
2. A Detailed Estimate
3. A Flexible Estimate

Each type of estimate offers varying degrees of accuracy and information. Each is a designed for a different circumstance.

Let’s take a look at these 3 types of estimates in detail:

1) A Ballpark Estimate / Rough Idea

A ballpark estimate will give you a rough idea about costs by providing a potential range of costs you might expect for your project. The purpose of this kind of estimate is to answer the question of whether or not you can even pursue the product development and what you might be looking at to do so.

A ballpark estimate is free and includes up to a one hour meeting with you, and usually takes 1 -2 hours of additional research and estimating on our part. This quote is not designed to have a high degree of accuracy but to give you a sense of the potential costs.

Should You Bank on a Ballpark Estimate?

Because a ballpark estimate is a rough guess, it should not be taken with much authority. Ball park estimates have been known to vary substantially from a “Detailed Estimate” by as much as 50%-80% because of the many unknowns within the project.

In a “Ballpark Estimate” it’s easy to overlook the small details and these add up. Such items include:

• Unstated/Implied Features – These include features which were never mentioned, or were mentioned in passing and not duly noted.
• Misunderstood Features – These include communication errors and occur when the customer has one idea and developer has another. These errors are common in ballpark estimates.
• Insufficient Clarity About Features – The level of detail about a feature is not fully explored and can create a disconnect in scope or the level of complexity of the project.
• Unexpected / Unplanned Features – These are features you weren’t aware you would need, but which became obvious during the development phase.

Should You Start Your Project with a Ballpark Estimate?

The short answer is mostly NO. If you’re trying to find out if building your idea is 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 you can reasonably pursue project.

If the ballpark estimate seems doable, then your next step should probably be to get a detailed estimate. Or you might decide you have enough information and are happy to get the project started using a flexible estimate approach (discussed later).

For some customers who have more financial leeway and are not as financially sensitive, a ballpark estimate may be sufficient. We only recommend starting your project with a ballpark quote if you clearly understand that it is a very rough estimate and that costs are not guaranteed.

2) A Detailed Estimate

When customers think of estimates, they usually think in terms of a detailed estimate where they can know the costs of the product upfront and can be assured they won’t go up substantially.

A detailed estimate is easiest to produce for smaller, well defined projects like websites and small products where the outcome is well defined and the project is 100 hours or less. As you start getting beyond 100 hours of work, the margin for error starts creeping in and such estimates can become notoriously inaccurate unless they are done very thoroughly.

If a detailed estimate is desired, both parties must get on the same exact page and there’s only one way to do that: to create a detailed Product Specification Document, along with wireframe mock-ups.

Steps to Create a Product Specification Document & Wireframes

To create a detailed estimate, you will take part in a RoadMapping Session. This is a small paid project to blueprint out your digital product or app.

Here is what we do in a Roadmapping Session:

1. We document out all the features and functions of your entire web or mobile app in a Product Specification Document.
2. We create wireframe sketches or mockups of the digital product
3. We discuss and prioritize features that should be included in the first version of your app.
4. We estimate the time and effort for each item on the list and from this create a detailed estimate.

This kind of estimate is very thorough and eliminates most of the points of misunderstanding. Because the details of your product are clearly defined, this is one of the least risky approaches.

After an estimate is prepared using this methodology and the project begins, the goal during development is to avoid departures from the specification document in order to stay within the detailed estimate. Having said that, if new features are in fact needed, the scope of work can be adjusted by a change order, which can impact the budget.

This kind of estimate is a rather conservative approach and seeks to protect both parties by getting a clearly defined scope of work agreed upon by both parties.

How Long Will It Take?

Creating a product specification document along with wireframes typically take anywhere from 16 – 40 hrs of work, but this varies depending on the size and scope of your project. It might take 2-4 weeks to complete this process.

Here are the factors which impact how long the process will take:

• How clearly defined the features already are and whether there is any documentation or mockups to start with.
• How many screens will be in the system.
• How many components or functions are on each screen.
• How complex the user interface will be.
• How complex the system is.
• What kind of risks and security issues the system has to account for.
• How efficient the team meetings are.
• How decisive you are about what you want and don’t want.
• How frequently we need to change course in the planning process.
• How quickly we get feedback from you to make updates to the plan.

Many of these factors are under your direct control and we will work diligently to keep your costs down and conserve time.

Estimates to Produce a Detailed Estimate

The below table shows estimated time and costs to produce a detailed product specification document for variously sized projects: