Cost Estimate

Here is a question that a participant in last week’s Project Management Workshop posted. Unfortunately we didn’t get to this question, so I wanted to post it here for everyone.

“Often clients ask for cost estimate before even discussing contracts and proposals. How can you put that together without a contract and also make sure you’re not working for free?”

This is a topic that addresses professional practice and will not be part of the exam. From my experience, if a situation like this arises, you would try to set up a memorandum of understanding with your client to establish an agreement that the work you are doing ahead of time in good faith that you will be compensated accordingly once the contract is signed. Of course, there is a risk that the project might fall through, but most often this kind of scenario would happen when you already have a relationship with a particular client or you are certain that even if this project doesn’t happen, there might be future work for you. Establishing great relationships is the best marketing. Clients will remember if you are providing great service beyond what is expected, but please be aware of the risk!

I would like to hear from everyone’s professional experience. Please chime in!

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