Budgeting for anything is difficult, whether it’s groceries, school, or household bills. But, how do you plan for unexpected costs that arise? What do you do if your car needs to go into the shop or your water heater stops working? In software development projects, what do you do when a feature takes longer and cost more to create than you thought? The good news is, there are ways to properly prepare for budget obstacles and come out on top.
We’ve gone through the budgeting process many, many times with clients and below are a few ways we’ve seen folks successfully prep themselves for the unexpected budget snafu.
For the subject of unexpected costs and how to prepare for them, let’s use the analogy of building a custom home…
20/20 Budget Vision
You have your home’s plans drawn up, your builder, plumber, electrician, etc. are ready to get to work, and your mortgage company has given you a set amount of money to build your new home. Now, do you A) walk away, not returning until someone tells you there’s an issue or your home is complete or B) stay involved in the process and in contact with your resources? If you want to be prepared for budget overages, you should have chosen B.
When you stay involved in your project, you’re less likely to get distracted and break your budget. Any good software firm will sit down with you regularly and update you on the progress of the project. Be sure to ask about and fully understand where you are in your budget. Once your project is underway, you can ask for budget predictions so you can prepare and make changes.
Keeping your eye on your budget will help you see challenges coming from a mile away.
Your home build is underway, but the estimate you received at the beginning of the project is going to need some adjustments. The hardwoods took longer to install than anticipated and the plumbing issues are preventing the sinks from being installed.
The same types of issues arise in custom software. Whether a feature turns out to be more difficult to create than initially thought or migrating your old data to your new software is slow-going – you should remain flexible. It’s important to pad your budget and time estimates. When you prepare yourself for your development team to require more time to work on a project, this causing the cost to rise, you’re putting yourself ahead of the problem. Your flexibility will allow you to get out in front of any issues than may spring up.
The average cost to build a custom home is $295,000, 39% of that cost is typically labor. That means you’ll have about $180,000 left for features like hardwoods, countertops, cabinets, landscaping, etc. If you’re keeping a close on your budget, you’ll realize that adding a pool, granite countertops, heated floors, and walk in closets may blow your financial plans.
This is where you’ll need to take a step back and look at the bigger picture. How important are those fancier things? Do you need them or just want them? Are they something that could be added at a later time?
This leads us into our next tip for preparing for budget woes…
Minimum Viable Product
Your dream home is nearly complete, but the chandelier in the dining room will take a month to deliver and will put you over budget. At this point you should ask yourself, can I wait until later to add this feature? Do I NEED it the day I move in or will my home look fine without it?
This is called an MVP or Minimum Viable Product. When you realize that your initial idea, with all features included, will take much longer and cost significantly more, you should start looking for the MVP. What can you roll out in the first release and still be happy with, knowing that in the future your software (or home) can be upgraded to include these features that were left out of the initial product?
When you begin your software project, have your MVP in mind. What trimmed down version of your product could your users still benefit from and your business profit from?
Trust Your Software Development Team
At the end of the day, don’t forget that we are working together because we believe in your business, ideas, and values. We want to see you succeed, and we will do everything within our power to make that happen so that we can continue to work together far into the future.
If you have any questions about our process or are interested in building something with us, please do not hesitate to get in touch!
Resource: 6 Items That Are Non-Negotiable When Building Software
Before you get started in developing your software app, discover what is non-negotiable in building a successful software application. In this guide, we share how to build your application on a solid foundation from nearly twenty years of our own personal experience.
You can grab a copy of the guide below and share it with your team!