Determining Product Development Cost
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This document discusses how Finish Line Product Development Services helps small companies estimate costs for product development projects. It notes that accurately estimating costs is challenging without clear requirements or designs. However, Finish Line provides a cost estimation spreadsheet that lists assumptions and allows testing different scenarios to determine how assumptions impact budgets. This tool can help small companies identify which early-stage projects are best to pursue further.
Determining Product Development Cost
- 1. Finish Line Product Development Services A Better Way for Small Companies to Develop Products Determining Product Development Cost By Steve Owens
- 2. Successful product development projects start with a realistic budget. Knowing how much it will cost to develop a product is necessary to calculate the Return on Investment (ROI) and ensure there is enough cash to complete the project
- 3. In large companies, this cost estimating is generally not an issue. These companies complete the requirements and conceptual design phases and then build a bottoms-up plan that accurately estimates these costs. However, in small companies, the cost of developing requirements, conceptual designs and development budgets can be significant in themselves – especially if many projects will be proposed, and only a few will be funded.
- 4. Traditionally, it has been difficult to accurately estimate product development projects before having clear requirements and an agreed-to conceptual design. There are many assumptions that one must make that will affect the cost. Our spreadsheet lists these assumptions and allows one to test the sensitivity of each assumption.
- 5. This tool can be very helpful for small companies looking for a better way to determine which projects should proceed to the requirements and conceptual design phase.
- 6. In addition, the tool highlights which assumptions will have the most impact on the product development budget and thus can instruct the requirements and conceptual design phases so that there is a higher likelihood of having an appropriate budget.
- 7. To Request a free Cost Estimate Spreadsheet. Please visit our website. Go to the Resources tab and pick Tools https://www.finishlinepds.com
- 8. After 15+ years and 1,500+ projects, we have developed a great set of tools to help improve product development and are happy to share these with you. The Rough Order of Magnitude Template as well as other tools can be found here : https://www.finishlinepds.com/resources/tools/ Finish Line PDS 94 River Road Hudson, NH 03051 info@finishlinepds.com Tel: 603-880-8484
- 9. Thank you!