In a previous blog post, we told you all about how to evaluate a new work opportunity. This week, we’ll give you a step-by-step guide on how to create a budget and schedule to be included in your project proposal for a new client.

Typically, there are 4 key things the client (and your agency’s leadership team) will want to know:

  • How much will the project cost?
  • Who's going to do the job?
  • How long will it take to get it done?
  • When will you be able to deliver?

Here’s how you get there:

1. Gather as much information as you can

If you are responding to a request for proposal (RFP), you’ll likely find some preliminary requirements and an outline of the project in the RFP documents. This will give you an initial idea of what is needed. In addition, try to talk to someone at the client-side. Nothing is more valuable than getting insight information, right from the source.

Essentially, what you want to find out and document is:

  • The purpose of the project
  • Key problems the client is trying to solve with the project
  • Who the project is going to serve
  • The high-level scope
  • Any required integrations or (technical) constraints
  • Potential dependencies
  • Deadlines

It's also going to be helpful to have a ballpark of the client's budget so you can shape up the project accordingly.

2. Come up with a delivery process

Once you have an understanding of what's required, come up with a process on how to deliver the project.

It will help to decompose the scope into key tasks, activities, and deliverables, and group these into project phases with distinct goals. A phase can be anything meaningful such as “Prototype development”, “UX design”, or “Development phase 1”. In Agile projects, your phases will be your high-level releases and sprints. As you shape your project into phases, think about any potential dependencies between phases and if there are any related milestones or deliverables.

3. Determine who’s needed to do the work

Based on the project’s scope, make a list of all the people and roles you’d need to complete the project. Take into account seniority and specific skill-sets, e.g. you might need a senior database developer who knows Oracle SQL.

Make sure you involve respective team leads and/or a solution architect. They know their teams best and will have an idea of who on their team would be a good fit, or if contractors would need to be brought in.

4. Estimate the project’s effort

A common estimation approach is the “bottom-up” approach: Take the tasks and activities you have identified in step 2 and estimate the ideal hours, days or story points (depending on what method you are using...) that it would take to complete the work.

Make sure you categorize your estimates by the roles you have identified in step 2 and document any assumptions you and the team have made. It’s really important to involve your delivery team in putting together these estimates, as they’ll have all the expert knowledge.

5. Create a budget breakdown

Once you have a list of the required roles and corresponding effort estimates, draft up your budget. If you used hour estimates in step 4, multiply your hours by your agency’s hourly charge-out rate to get the total $ amount.

Depending on the type of project, you might also need to add any material or equipment expenses that your project will incur (for example hosting costs or any hardware that’s required...) and include any potential travel costs. Don’t forget to add some contingency in case things don’t go as planned.

6. Build out a high-level schedule

Use a planning tool like Runn to build out your high-level project schedule. Select a possible start date and line up your project phases and work packages, taking into consideration any dependencies and constraints you identified in the earlier steps. Once everything is lined up, you’ll be able to see the overall duration and an estimated end date for your project.

7. Bring it all together

You’re almost there. As a final step, go over and check everything with your team. You might need to make some adjustments, e.g. a dependency in your schedule might have an impact on your effort estimates, which in turn can have an impact on your budget - it’s all interconnected!

Once you’re happy, and you can confidently answer questions about the scope, assumptions, your possible team set-up, how much the project will cost and how long it will take, it’s time to put everything in your proposal document and send it off to the prospective client. Good luck!