How to Estimate Project Costs: A Method for Cost Estimation

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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.

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

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.

You may also like the companion videos:
- How to Deliver Effective Project Cost Management
... youtu.be/7bXcc7AYajo
- Project Financial Management – 5 Tips for Good Cost Control | Video
... youtu.be/1mHaBKAamIU
- What is a Discounted Cash Flow (DCF)
... youtu.be/Pr_2fYwldmw
- What is a Business Case?
... youtu.be/c95wGysj9Nc
- Project Business Case: Write an Effective Project Proposal
... youtu.be/teUEA2CCyG8

For more details, check out three thorough articles on our website:
1. Project Estimation: Master the Art and Craft
- onlinepmcourses.com/project-estimation-master/
2. Project Cost Management – The Essential Things to Know and Do
- onlinepmcourses.com/project-cost-management-ess…
3. Great Big Guide to the Project Business Case
- onlinepmcourses.com/project-business-case/

My basic introductory book to Project Management is How to Manage a Great Project (published by Pearson): geni.us/4Iz6M (affiliated link).

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