How Do You Estimate Time for A Project? (7 Steps + Tips)

I still remember my first project—I was excited but also nervous. I thought I had everything planned perfectly.

But as time passed by, a task I thought would take two hours ended up taking a whole day, and my deadlines started slipping.

Sound familiar?

That’s when estimating project time can help you out beforehand. But how do you estimate for a project? Here’s how:

1. Analyze historical project’s data
2. Know your project’s scope
3. Break the projects into smaller one
4. Forecast time for your project
5. Plan the schedule
6. Allocate some time for revisions
7. Measure your success

But there’s more to this. In the coming sections, I’ll break down each step in detail, methods, and a few tips to avoid overruns. So let’s get started!

Why Should You Estimate Time to Manage Projects?

Did you know 70% of companies face at least one failed project a year? Whereas only 0.29 of projects were completed on time.

That’s why it’s important to estimate time to manage a project.

When we estimate time in project management, we try to figure out how long a task or project will take. It includes effort estimation for each task and allocates resources wisely.

Here’s why you should estimate time for a project:

• Handle Day-to-Day Operations: When you know how long tasks will take to help you plan your daily activities, it becomes easier to reach everyday goals. Without this, you will only be scrambling to meet deadlines.
• Coordinate with Your Team: In any project, you surely have different team members and capacity planning for various tasks. Estimating time will help everyone to stay in sync, ensuring that tasks get done on time.
• Meet Client Expectations: Clients expect updates and progress reports. Accurate time estimates allow you to give them realistic timelines for when work will be finished.
• Plan for Unforeseen Issues: Projects rarely go exactly as planned. When you estimate time, it helps you build a buffer for unexpected delays. This way, you’re prepared for the unexpected and can keep the project moving.
• Increasing Team Productivity: When you know what needs to be done and how long it will take, it makes things much easier!  If you can prioritize your work, it will increase the team’s productivity as well.
• Meet External Deadlines: External factors like market conditions, launch dates, or regulatory deadlines often set strict timelines. With proper time management, your project will meet these deadlines without last-minute rushes.

How to Estimate Time for A Project: Step-by-Step Process

The first time estimating the time for a project can be quite confusing.  But these steps can help you ace the task and improve accuracy:

1. Analyze past data for a similar project
2. Know your project’s scope
3. Break the project into smaller tasks
4. Timeline forecasting of your project
5. Plan the schedule
6. Allocate some time for reviews and adjustments
7. Measure your success

Step 1: Analyze Past Data for Similar Project

According to Slingshot, 56% of employees use data to make decisions. This shows how important role data plays in estimating project time accurately.

The easiest way to estimate time for a project is by looking at similar project data you’ve done before. Check how long tasks took, who worked on them, and if there were any delays.

Make a habit of keeping track of how long tasks take to complete. It improves your estimates.

You can compare your initial guesses with the actual hours worked and see why some tasks took longer. Moreover, this also helps you get better at planning for the future.

Step 2: Know Your Project’s Scope

Your project’s scope guides you through the complexities of project management and keeps you aligned with your goals.

Without having a clear project scope, it’s easy to forget important details. This often happens when we get too comfortable after working on similar projects.

Defining the project scope is very important, no matter how experienced you are. It acts as the base for the whole project. Plus, laying out project phases will allow you to track project progress and make changes on the go.

Write down your goals, what you will deliver, timelines, and limits. A well-crafted project scope can prevent costly mistakes and misunderstandings.

Step 3: Break the Project into Smaller Tasks

If you’re assigned to a project, breaking it into smaller tasks can make all the difference. You’ll get a clearer view of the whole process, and it becomes easier to track progress.

Breaking a project into smaller tasks helps you create a list of what to do first. So, you can tackle the most important tasks before others.

Secondly, smaller tasks stop you from feeling overwhelmed, which makes you work better and faster.

Finally, when you work with a team, giving tasks individually everyone works together. In such a way. the team produces high-quality results without overworking.

Step 4: Forecast Time for Your Projects

Forecasting in project management, a.k.a timeline forecasting, predicts what a project may look like in the future. It guides you on how to use resources based on past and current data.

It identifies key performance indicators (KPIs), recognizes if you need new skills, manages your resources better, and your project delays.

There are several types of forecasting methods:

1. Trend analysis: Studies past trends to predict future outcomes.
2. Break-even analysis: Determines how much you need to sell to cover costs.
3. Cost-benefit analysis: Compares the potential benefits of different projects.

For successful forecasting, be comfortable with using new technology, know your team’s strengths, and combine data from different sources.

Step 5: Plan the Schedule

Once the time estimates are ready, it’s time to plan the work schedule.  A project schedule organizes tasks, resources, and deadlines.

It makes sure your project finishes on time and takes care of task dependencies, saving you costs and resources.

Project managers often use software to create and track these schedules. So they can see how tasks are progressing, manage resources, and costs.

When making a project schedule, include important parts like deliverables, task durations, dependencies, and resource availability.

Step 6: Allocate Some Time for Reviews and Adjustments

As you work through planning, doing, and completing your projects, set some time for reviews and changes. In this step, pause and check how things are going.

This assesses your progress, identifies any problems, and makes necessary changes before they get too big.

Regular meetings or check-ins are a must to conduct this process. These meetings keep your project on track, focused on its goals, and flexible to changes.

You can also adjust your plans or shift priorities.

Regular reviewing and adjustments improve the quality of your project. It also encourages better teamwork in the project.

Step 7: Measure Your Success

Finally, when you reach the project’s end, compare the estimated time with the actual time taken.

It identifies areas where you have over- or underestimated. Evaluating time spent on tasks can also highlight how effective your resource allocation was. It is also helpful for future adjustments.

Moreover, you can use this information to improve estimates for future projects.

A successful project can bring big benefits to you, your company, and your clients. It’s important to know how to measure the success of future projects.

So, you can see how well your project is doing and make changes to improve it.

What are Project Estimation Techniques and the Latest Trends?

There are time estimation methods in project management. Some of them are discussed below:

Work Breakdown Structure (WBS)

The Project Management Institute (PMI) defines WBS as “a deliverable-oriented hierarchical decomposition of the work to be executed by the project team.”

Work Breakdown Structure (WBS) improves how we complete tasks by breaking down larger project tasks into smaller ones.

It makes it easier for you to create a proper project timeline and manage your time effectively.

For example, we want to estimate the time needed to prepare meals for the week. Here’s how we can estimate cooking time by meal type:

• Breakfast - 2 hours
• Lunch - 3 hours
• Dinner - 4 hours
• Snacks - 1 hour
• Desserts - 2 hours

This breakdown makes the meal prep process easier.

You can use two main techniques for this: bottom-up and top-down estimation.

Three-Point Estimating

The three-point technique works with three scenarios: the optimistic scenario, pessimistic scenario, and finally, the most likely scenario. This is where you expect some bumps but still have a pretty good idea of what to expect.

• The optimistic scenario is where everything goes perfectly.
• The pessimistic scenario is the opposite, where project delays and extra costs may happen.
• Lastly, the most likely scenario reflects a realistic view with some bumps along the way.

These three perspectives create different potential outcomes instead of sticking to just one fixed estimate. This method helps you avoid nasty surprises and leads to a more balanced view of time and costs.

The formula goes like this:
Estimated Time= (A + 4B + C) / 6

Here,

• O = optimistic estimate
• M = most likely estimate
• P = pessimistic estimate.

Another approach is the Critical Path Method (CPM), which identifies the longest path of dependent tasks. You can also focus on this to maintain the project timeline.

Bottom-Up and Top-Down Estimating

Bottom-up estimating starts by identifying large tasks and dividing them into smaller, detailed ones. Each small task has a fixed time estimate. This technique is helpful for estimating time and increasing accuracy.

On the other hand, top-down estimating creates an overview of the expected timeline before explaining it into specifics.

You can do this by using historical data to form a time estimate for the whole project.

Consider analogous estimating for projects similar to past ones. This method relies on historical data to quickly estimate timelines.

Both techniques complement each other. The bottom-up breaks down tasks for total project time, while the top-down provides a broader timeline for schedule management.

Functional Point Analysis (FPA)

Functional Point Analysis (FPA) helps you understand software functionality.

Instead of focusing on how something is built, it emphasizes what the software can actually do. This method centers around the core of a project.

It also breaks down a software system into different functions. Each function is assigned a weight based on its complexity.

One of the key advantages of FPA is it works across various software development methods. That’s why it is a reliable tool for project management.

Plus, it fits into both top-down and bottom-up estimation approaches and can be combined with time-tracking software.

PERT (Program Evaluation and Review Technique)

A PERT chart starts with breaking down large tasks into smaller ones, which is also known as WBS. These can be placed in a PERT chart or a Gantt chart.

PERT focuses on estimating time, understanding what each task needs, and scheduling tasks efficiently. It is useful for project managers to estimate how long the project will take.

PERT uses a time-tracking app that updates the estimated time to complete (ETC) after each task is finished.

Moreover, it gives three-time estimates for each task—the shortest, the most likely, and the longest.

Gantt Charts

Gantt charts are a useful project management tool for visualizing project schedules. They show you the start and finish dates of different tasks into the project. Such as tasks, resources, dependencies, and durations.

Gantt charts can:

• Plan projects
• Organize tasks
• Define task sequences
• Establish dependencies

Project Management Software

When you have a big project, there are often many tasks to manage—deadlines, meetings, and sometimes last-minute changes. That’s why I suggest using a project management software.

Some of the popular project management software include: Notion, Asana, Trello, etc. Along with that, I’ll highly recommend using a time tracking software like Apploye. It tracks tasks, sets deadlines, and keeps everything organized.

Further Read: 8 Biggest Project Management Challenges

Tips for Effective Project Time Estimation

By now, you already know how to estimate time for a project. Here are some of my tips that will help you in the long run:

Consult an Expert

When you plan a project, it may seem easy to estimate timelines without considering all the details.

However, I suggest consulting a person who will actually be completing the task often brings a different perspective. Trust me, that will help a lot.

Incorporate a Buffer

Before you start your project, incorporating a buffer time is a wise decision. When you have extra time, you can manage unwanted issues that may arise.

Some experts suggest having 20%, while others suggest as much as 50%. It depends on your project’s complexity.

Learn from the Past

Have you ever had times when a project ran far behind schedule? The planning fallacy is very common where tasks are often underestimated in terms of the time they require.

Historical data plays a big role in estimating a project’s time. When you have an idea of your previous projects, it becomes easier to estimate.

Track Time Accurately

We often don’t count the virtual meetings, testing, and quick communications. They seem minor, but often they can add up significantly.

As time passes, these small tasks can accumulate and impact the overall timeline.

That’s why time tracking is a must.

Accelo reported that tracking time can increase revenue by up to 61%. Using a tool like Apploye can track your overall project timeline.

Read More: Why is it Important to Track Time in Project Management?

Conclusion

I hope these methods help you with how to estimate time for a project because they have done wonders for many.

You may often face some troubles at first while estimating, and that’s okay.

It might not always go smoothly, but each mistake is a chance to learn. Other than that, a time-tracking tool like Apploye can manage tasks and time much easier.

FAQs

1. What mistakes to avoid when estimating project time?

Some common mistakes to avoid:

• Not considering unexpected delays
• Underestimating task complexity
• Relying only on past experience

2. How do I use the Time Estimation Formula?

The Time Estimation Formula helps you predict how long a project will take by using three different scenarios:

• A: Best-case scenario
• B: Most likely scenario
• C: Worst-case scenario

To calculate the estimated time (E), use the formula:
E = (A + 4B + C) / 6

3. What are the various ways to estimate time?

There are various techniques and trends to estimate time for a project:

• Work Breakdown Structure (WBS)
• Three-Point Estimating
• Bottom-Up and Top-Down Estimating
• Functional Point Analysis (FPA)