How to estimate software development cost and charges?

[ryantechnerd]

Me and my friend set up a software company recently,
and my first project is to develop a software for my friend's company,
the project was estimated to be completed in 1 month,
but I took 3 months to complete the project.
After reviewed my project development progress,
I realize that root cause is due to I didn't analyze the project in detail,
so I only estimate total man hour required base on
project main features instead of detail functions.

Few days ago, he gave me another project, and this time I wanted to
analyze the project in detail before I start to estimate total man hour required,
but when I look at the requirement specification, I think it will take me
2 to 3 weeks just to analyze the project. I can charge the analysis fee
because my friend is the shareholder.

If I get a project from a customer, and if the project may take
me 2 to 3 weeks to analyze the project in detail, how can I charge my
customer for the detail analysis?

In current software development market, software company can not start project
before customer agree on the estimated man hour. If I do not take 3 weeks to
analyze a project in detail, I may end up with losing money due to under
estimate the project. If I take 3 weeks to analyze a project in detail,
but the customer think the project is too expensive,
and do not want to proceed, my time will be wasted.

[mukherjee]

Draw message sequencing charts, identify components, estimate number of functions , estimate line of code, put 20% buffer to your estimate.

[Luuk]

Try to get some project which you can invoice after the project is finished. Add the 'no-cure, no-pay' thing, some customers like this because if you do not deliver, they are not charged. (Make sure to make a detailed agreement on what is to be delivered!)

Still do make an estimate on the time needed to complete the project. In the end you can make a 'good' guess on how much your estimate differs from the real world, in the example above there was a factor 3 (3 months in stead of 1 month)

Based on this factor you could make an estimate, and put a factor 3 over it. This factor will become more precise as you get more experience.

[jonrgrover]

I build a nearly complete data model, including all tables and columns and then multiply the number of columns by 4 hours. Make that 3 hours if I am using a productivity enhancer like MVC 5 or Ruby on Rails. Make that 5 to 8 hours if there are unusual conditions which will add to the time. For example: COTS software will take longer. High bureaucracy environments will take longer. Detailed and functional testing harness development will take longer. Unfamiliar technologies will take longer. Add an hour for each unusual condition.

Of course you can charge your customer for data model construction because that takes some time and it is part of the development job.