From Estimates to Evidence, Use Historic Time Data to Price Flat‑Fee Projects
Flat‑fee pricing can feel like a gamble. Price too low, you bleed margin; price too high, you scare clients. The antidote is evidence. Harvard Business Review reports that large IT projects run 45 percent over budget on average, largely because initial estimates lack solid data source. Remotinio already stores the raw data you need. Follow this guide to convert that data into precise fixed fees.
You will learn:
- The six numbers every evidence‑based estimate needs
- How to extract historic hours from Remotinio
- A Google Sheet template that calculates median, buffer, and risk premium
- A four‑step quoting routine you can reuse every quarter
Setup time: thirty minutes; future estimates: ten.
1. Collect the Right Past Projects
Not every historic job helps. Choose three to five projects that match the new scope in size, tech stack, and client profile.
Checklist
- Same deliverable type, for example SaaS web app or Shopify theme
- Similar complexity; no one‑page microsites mixed with twelve‑template builds
- Delivered within the last eighteen months to reflect current process
2. Export Actual Hours from Remotinio
- In Remotinio open Reports → Project.
- Set the date range to cover each past project’s production months.
- Export CSV; copy rows for the chosen projects into a new Google Sheet tab named Raw Data.
- Keep only columns: Project, Sub‑project, User, Hours.
3. Build the Estimate Model Sheet
Create a second tab named Estimate Builder and add these columns:
| Column | Purpose |
|---|---|
| Deliverable | Feature or task group, like Homepage Design |
| Median Hours | 50th percentile from past data |
| High Hours | 75th percentile; cushion for risk |
| Planned Hours | Chosen number for the new quote |
| Hourly Rate | Your client‑facing blended rate |
| Cost Buffer | Planned Hours × 0.1 (ten percent) |
| Price | (Planned Hours + Buffer) × Rate |
Set cell formulas to pull medians and percentiles with =MEDIAN and =PERCENTILE.
4. Calculate Median and High Hours
In Raw Data, pivot hours by deliverable. Suppose Homepage Design shows past totals of 18, 22, and 25 hours.
- Median = 22
- 75th percentile = 24.5
Copy those values into Estimate Builder.
Repeat for each deliverable. Where sample size is two or fewer, use the higher value as Planned Hours.
5. Add a Cost Buffer
Projects rarely run exactly on median. Add a ten percent buffer to Planned Hours. If Homepage Design median is 22 hours:
- Buffer = 22 × 0.1 = 2.2
- Planned Hours + Buffer ≈ 24.2 (round to 24.5)
6. Multiply by Your Blended Rate
If your blended rate is $150 per hour: Price = 24.5 × 150 = $3 675
List each deliverable; sum the Price column for the total fixed fee.
Benchmark: digital agencies target a fifty percent gross margin on fixed‑fee work according to BenchPress 2024 Agency Finance Survey. Check margin by dividing total cost (internal hourly cost × Planned Hours) by price.
7. Present the Quote with a Scope Table
Clients accept data‑backed quotes faster. Include a scope table:
| Deliverable | Hours | Cost |
|---|---|---|
| Discovery | 12 | $1 800 |
| Homepage Design | 24.5 | $3 675 |
| About Page Design | 14 | $2 100 |
| Development | 60 | $9 000 |
| QA | 12 | $1 800 |
| Total | 122.5 | $18 375 |
Mention that hours derive from comparable past projects; confidence promotes trust.
8. Run the Four‑Step Quoting Routine Every Quarter
- Snapshot – export last quarter’s finished projects.
- Update medians – refresh formulas in Raw Data.
- Adjust rate – raise blended rate to match rising salaries; even a five dollar increase lifts margin two points.
- Archive sheet – duplicate and timestamp; maintain an audit trail.
9. Common Estimation Pitfalls and Fixes
| Pitfall | Cause | Fix |
|---|---|---|
| Over‑relying on a single outlier project | Unique client demands | Use medians not means; exclude outliers above 90th percentile. |
| Ignoring non‑billable internal hours | Discovery sessions untracked | Create a Discovery sub‑project and include those hours. |
| Forgetting change requests in historical data | Tweaks logged in main project | Move future tweaks into a Change Requests sub‑project for clarity. |
| Outdated hourly rate | Inflation and salary growth | Review blended rate each quarter. |
Related reads: Preventing Budget Overruns; Scope Creep Costs Real Dollars.
10. Example: Pricing a Shopify Theme Build
Past data shows:
| Deliverable | Past hour totals |
|---|---|
| Theme Design | 26, 28, 30 |
| Theme Dev | 70, 74, 80 |
| QA | 14, 16, 16 |
Median hours are 28; 74; 16. Apply a ten percent buffer:
- Design 28 + 2.8 = 30.8
- Dev 74 + 7.4 = 81.4
- QA 16 + 1.6 = 17.6
Total planned hours ≈ 130. Multiply by $160 blended rate:
Price: $20 800
FAQ
How large should the historic sample be?
Three to five similar projects give a stable median; more is better, but avoid mixing apples and oranges.
Can I use role‑specific rates instead of blended?
Yes; list each deliverable twice, design and development, with their respective rates.
What if we lack past data for a new service?
Use industry benchmarks, then track the first project closely; feed its actuals into your sheet for the next estimate.
Your Next Move
Clone the Project Margin Tracker sheet; rename it Estimate Builder; load your last three similar projects; generate a data‑based flat fee for your next proposal. Evidence beats guesswork, every time.
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