Ask HN: Client wants me to set estimates and not go over... What should I do?

[erikpukinskis]

I've been working for a client for several months. Up until now, the estimates have been pretty casual: sometimes they ask when I think something will done. Often they just assign me a story and I bill them for it.

But recently a feature took substantially longer than estimated (they pressured me to lower an estimate, and I stupidly caved). Now they're asking that I make an estimate for a feature, get approval, and then not bill for more than the estimate.

What do folks think I should do? To me, software engineering is fundamentally a chaotic activity. Sometimes something you think will take an hour takes a day.

What seems fair to me is that I set an estimate, and then bill for the estimate, regardless of how long it actually takes... that way my underestimations are compensated with my overestimations. Then I can track my velocity and over time get paid for the time I actually work, rather than constantly absorbing the overages.

What do other folks do?

[jules]

Give them high estimates. You taking the risk should cost them a premium. Make sure they understand that. And fix the scope, or they'll try to maximize the amount of time you work for the fixed budget.

[mishmax → jules]

Yeah I would overestimate the cost, tell them exactly what they're getting, and if they ask for something new don't be afraid to tell them if it's not part of the estimate, and send them a new estimate.

[toast76]

The answer is quite simple. Never do a variable amount of work for a fixed price. Billing on "estimates" is a risky proposition for both sides, and you need to explain this to your client. They may win sometimes, but you may also win. Explain to them that they may end up paying double the actual cost if you're forced to estimate high, and they'll quickly work with you to refine the pricing.

Some clients will try get this past you by requesting a "quote estimate" instead. Which is them saying, "we will pay less if it's less, but we won't pay more". I have one client who does this constantly. The best way around it is to specify EXACTLY what you will provide them, and EXACTLY what they must provide you. If anything changes, it's a variation and you quote the change before doing any more work. They'll soon get the picture that uncertain work leads to uncertain pricing...no matter how they try to do it.

If you are uncertain as to how long the work will take, you need to improve your estimation skills. Sorry! Software engineering is most definitely NOT a chaotic activity. Every task can be broken down into smaller quantifiable components. Estimate on the components to come up with your quote. If you can't accurately estimate how long something will take, then it won't matter how you quote, you will eventually lose out.

I use the (average of best case + worst case) + slippage (15-20%) method which serves me pretty well. I learnt this from a large engineering firm I contract to which they use to quote $10million+ jobs. It evens out uncertainty and leaves you with some wriggle room.

[_b8r0]

You need to tell them (in the most diplomatic manner possible) that they can't have their cake and eat it.

The can have the work at a fixed price if they want, or they can pay for time but it's unrealistic to expect both. It sounds to me like they were very unhappy with the job that took longer than estimated, and you need to address this if it's the root cause of their change.

[andrewtbham]

It sounds like they feel like they got burned on the one feature. One thing I try to do is if something starts to run late is let them asap. When did u tell them it was running late?