Guessing is not a strategy: How to build decision velocity with AI and real-time data
June 10, 2026 | Live Webinar
Cesar Abeid has a new book out, called Project Management for You, and it’s a step by step guide to everything you need to get started with managing a project. You may feel that you have enough experience to not need a beginners guide to project management, and you may be right. Still, it doesn’t hurt to refresh ourselves on the basics every so often, and that’s never more true that on topics relating to project budgets. Because if you mess up your project’s finances it is very difficult to recover your credibility and the lost cash!
Here’s what Cesar has to say about project estimating for budgets.
Estimating a Work Package
Cesar breaks down estimating the cost of a work package into three areas: people, tools and materials.
People: “Estimate how many hours/days will be required by the person responsible for the work package, and calculate how much that will cost,” he writes. This, he says, is the best way to go if you are paying your team members for their time and they are billing you in hours or days. If you plan to pay them a flat rate for the task, then he points out you’ll need a quote to use as a estimate.
Tools: Think about the tools you need to complete the work package. “This determination will include actual tools, equipment, and software that you might have to purchase to enable your team to do the work,” he writes. Many of these you may already have but you might need additional tools in order to deliver this particular project.
Materials: If tools are what you need to do the project management, materials are what you need to do the work. Small projects, digital projects and other types of project may have very little here. “If you are building a deck or a garage, then materials might be the largest part of your estimate,” Cesar writes.
These three mini-estimates make up the components of the budget estimate for your work package. Add them up and that’s the total cost for the work package.
Estimating Your Project
“Once you have the estimate for each work package, add them up,” Cesar writes. “The resulting number will be the cost estimate for your project.”
This isn’t rocket science but you’d be surprised how often elements get left out. Check that you’ve included all your work packages in your overall estimate.
Then check your workings the other way. If it’s a budget item that you know needs to be spent but there is no work package that goes along side it, should you be creating a work package to cover that element? If not, how are you going to track and monitor that expenditure as the project goes along? Don’t make it easy to trip yourself up later.
Work with Ranges
I am a big fan of working with ranges because they help set expectations for project stakeholders and provide you with a bit of leeway. Cesar says the same. He advises estimating twice for each element. The first estimate is based on the best case scenario (say, $100) and the second on the worst case (say, $200). Together they give you a range of financial confidence (the task will cost between $100 and $200).
It can be difficult to convince your sponsor to understand ranges. There’s a good range (ha ha!) of comments on this article about how challenging it can be to talk to your project sponsors about why this way of thinking is beneficial when it comes to project finances. Sponsors like hard, precise numbers and with many projects that have an uncertain outcome that isn’t as easy as they’d like.
Plan with Confidence
Cesar concludes by saying that your estimating gives you the data you need to plan with confidence. If you’ve done the same for duration estimates as well you are in a good position to know how long your project will take and what you need to pay for it. With this information, you can make decisions about tasks and expenditure as well as the people you need to involve.
He writes:
“If you can estimate your cost and time based on the requirements of your project, the constraints that are present, and the resources available to you, you can plan with confidence and make promises that you know you can deliver on.”
How do you plan with confidence? Let me know your tips for estimating and planning in the comments below.
Cesar Abeid’s book, Project Management for You, is available in print and ebook. Find out more on Cesar’s website.
Posted on: October 16, 2015 12:00 AM |
Permalink