How to Estimate Project Costs | Video

There are two reasons why cost estimation is important for project managers. First, it’s extremely hard to estimate project costs well. And second, poor cost estimates are often the biggest reason for a project budget over-run.

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The Project Knife Edge

And there’s another factor, which I refer to as the ‘project knife-edge’. This is the competing pressures to:

• reduce your costs to satisfy your funder
• increase your budget to de-risk your project

Estimating Project Costs is Hard

All of this makes estimating project costs tricky.

So, in this video, I’ll talk you through the best way to estimate project costs:

1. The Project Cost Estimating process
2. The sources of costs in project management
3. Estimating methods and my cost estimation tips
4. How to add a contingency to your project costs
5. From Estimates to Budget to Cash flow.

Learn more

You may also like the companion videos:

• How to Deliver Effective Project Cost Management
• Project Financial Management – 5 Tips for Good Cost Control | Video
• What is a Discounted Cash Flow (DCF)?
• What is a Business Case?
• Project Business Case: Write an Effective Project Proposal

For more details, check out three thorough articles on this website:

1. Project Estimation: Master the Art and Craft
2. Project Cost Management – The Essential Things to Know and Do
3. Great Big Guide to the Project Business Case

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For more of our videos in themed collections, join our Free Academy of Project Management.