How should you charge for a software project?

When someone begins the development of software, one question that with do is, how should I charge for my job? How should you calculate the cost of a project?. And there are different methods to perform this calculation, and you must be careful that the cost it charges to cover your fees. First, you need to establish specific objectives and functionalities that the project will have. Also, you should be establishing your cost per hour and how much time you need to finish the project. The techniques of project software estimations can be classified into four, they are:

• Software estimation by expert judgment
• Software estimation by analogy
• Software estimation by decomposition
• Software estimation by means of estimation models

Here you can read more about these estimation techniques.

One method to estimate the total duration of a project is the PERT method.

PERT method

Program Evaluation and Review Technique (PERT) is a method used to examine the tasks in a schedule and determine a Critical Path Method variation (CPM). It analyzes the time required to complete each task and its associated dependencies to determine the minimum time to complete a project. This helps in the creation of more realistic schedules and cost estimates.

For this analysis you must be the next steps:

Step 1: Create a list of all activities to realize the project. The activities must be sequential.

Step 2: Determine optimistic, pessimistic, and most likely estimated duration for each activity.

Optimistic duration: This is the activity's duration if there are no difficulties or unforeseen complications.

Most likely duration: This is the most likely duration the activity will take to complete. Small delays are taken into account and based on previous data for the duration of the activity. complications.

Pessimistic duration: This is the maximum time required to complete an activity.

Step 3: Calculate the estimated PERT, standard deviation, and variance for each activity.

activity duration= (Optimistic + 4 (Most likely) +Pessimistic) / 6

standard deviation (σ) = (Pessimistic — Optimistic) / 6

variance = σ*σ

Step 4: Estimate the total duration of the project and multiply by the cost per hour.

Add all the activities' duration, for obtaining the total duration

To obtain the total standard deviation you must be added all the variance and take the square root. With this, you can calculate the range with a confidence interval.

• 1 sigma = 68%
• 2 sigma = 95%
• 3 sigma = 98%

With 95% of the percentage the range is: total duration ± 2 sigma

Project cost = cost per hour * total duration

Here you can see an example: EXAMPLE

Page to calculate your project cost

This project is about a web page where you can calculate the estimation total duration of a project using the PERT method. On this page, you can perform the following actions.

• Add the activities you do and three durations for this, Optimistic duration, Most likely duration, and Pessimistic duration
• Delete an activity
• Add the name project and cost per hour
• Import an Excel with the activities
• Export an Excel

Please visit my DEMO

This was coded using next.js with Typescript. You can get the code in my GitHub repo.

Thanks for your time reading this post 😃 !!

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