How to Make a Cost Estimate in Microsoft Excel

One of the struggles that a project manager faces is the cost estimation. However, it is essential to do it right as it will define the success of the said project. Clients would view estimate as one of the factors for their decision as it would narrate as to what would be the outcome of the project that they will invest. So, if you are a project manager who wanted to succeed through their cost estimate, the following are tips that you can follow in making one.

1. Know Project Priorities

To start the cost estimation process, elucidate the project priorities and make an outline. For example, if you are making an estimate for the landscaping of your commercial building, you need to consider factors like budget, labor, price, and more. Doing this would help you come up with better estimation.

2. Consider Risk Factors

One of the biggest hurdle that you need to overcome in coming up with your estimate is the risks affiliated to it. With that, you can conduct an assessment to have a risk management and come up with a plan. Conduct an analysis and construed some points for writing your estimate.

3. Pitch Yourself

Not all businesses know this but an estimate can be a sales tool. With that, your estimate must spell out your business. You need to gain the trust of your clients and including trust elements would do the work for you. Also, it legitimizes your document, making it more reliable.

4. Include Payment Terms

As you wanted your clients to invest for your project, you can lay out a list of payment terms that your clients can consider. Usually, the most common payment term is the Net 30 or a 30-day payment process. Also, as you incorporate the payment terms, you need to include the possible start and end date of the payment.

5. Be Competitive with Pricing

Consider the fact that you are not the only business in your industry that needs clients. With that, you need to be competitive with pricing your cost estimate. Conduct your research by referring to the market. Then, balance everything out. If you come too cheap, it would be risky as your clients might view your project as underwhelming. But, if you come too high, there would also be a misconception.

General FAQs

  • What to include in an estimate?

  • What are three types of cost estimation?

  • What are the general types of costs?

  • What are the most common methods of cost estimation?

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