Estimating software projects, in my experience, is more art than science. It’s an exercise in risk mitigation—balancing the unknowns between both parties.

The Challenge of Scope and Risk

It all starts with scope. The bigger the scope, the greater the risk and potential for price bloat. The critical question becomes: who assumes this risk?

Most clients want a flat fee—and why not? As humans, we crave certainty. There’s comfort in hearing, “This will cost $100k and take three months. Guaranteed.”

But here’s the problem: no matter how confident the estimate sounds, it’s ultimately an educated guess—or worse, a gross misrepresentation of reality.

When risks aren’t addressed, two bad scenarios can play out:

1. The padded estimate: To protect themselves, developers overestimate the time and cost. While this offers safety, it can lead to bloated budgets.
2. The undercooked estimate: When the budget runs out but the work isn’t done, the client often gets a rushed, subpar product.

Balancing the Budget

So, how do we mitigate these risks? By meeting in the middle. Instead of aiming for a flat fee or leaving the budget completely open-ended, start with a clear budget and a focus on prioritizing features.

Here’s the beauty of software development: you don’t have to build everything at once. Most ideas can be scaled to fit various budgets if you embrace the concept of an MVP (Minimum Viable Product).

Far too often, people aim for an overly ambitious version of their product right out of the gate. But with software, you can iterate. Build a solid foundation, then expand as you go.

A Practical Approach to Estimation

Thoughts on Estimating Software Projects

Estimating software projects, in my experience, is more art than science. It’s an exercise in risk mitigation—balancing the unknowns between both parties.

The Challenge of Scope and Risk

It all starts with scope. The bigger the scope, the greater the risk and potential for price bloat. The critical question becomes: who assumes this risk?

Most clients want a flat fee—and why not? As humans, we crave certainty. There’s comfort in hearing, “This will cost $100k and take three months. Guaranteed.”

But here’s the problem: no matter how confident the estimate sounds, it’s ultimately an educated guess—or worse, a gross misrepresentation of reality.

When risks aren’t addressed, two bad scenarios can play out:

1. The padded estimate: To protect themselves, developers overestimate the time and cost. While this offers safety, it can lead to bloated budgets.
2. The undercooked estimate: When the budget runs out but the work isn’t done, the client often gets a rushed, subpar product.

Balancing the Budget

So, how do we mitigate these risks? By meeting in the middle. Instead of aiming for a flat fee or leaving the budget completely open-ended, start with a clear budget and a focus on prioritizing features.

Here’s the beauty of software development: you don’t have to build everything at once. Most ideas can be scaled to fit various budgets if you embrace the concept of an MVP (Minimum Viable Product).

Far too often, people aim for an overly ambitious version of their product right out of the gate. But with software, you can iterate. Build a solid foundation, then expand as you go.

A Practical Approach to Estimation

Here’s a process that works:

1. Identify your budget: What’s this project worth to you?
2. Prioritize features: Focus on the functionality that delivers the highest return on investment—your “bang for the buck.”
3. Collaborate and trust: Share your budget and priorities with your developer, and have an honest conversation about what’s feasible.

This approach doesn’t eliminate risk entirely, but it shifts the focus to controlled scope and thoughtful execution. It forces both parties to think critically about why the project is worth doing—and how to make the most of the resources available.