Overrun Rules of Thumb

I caught a 'reno' expert pass on tips for those wanting to get into buying a fixer-upper property. Namely one that can be 'flipped' at a profit after renovating it.

One guideline for the first-timer was that brutal catch, the over-run.

They suggested the time-span for typical work - redo two bathrooms, a kitchen, general redecorating all around - ought be three months.

Yet for those on their first project, an extra month should be planned for.

Call it school fees.

Alongside too, the extra budget this time and learning curve brings. Amounting to allocating 20% more cash than you initially plan out to spend.

So, add on a third more time with a fifth more money.

This reminded me of the wizened trope of the new business endeavour. Ranging from startup to fresh product or division.

The heuristic here being that whatever you think it'll be, it'll invariably end up taking twice as long and cost double the money to get off the ground.


I realised I'd also come across many sector-specific versions of this.

Principally in old school Enterprise-wide software installs. Each niche had its own flavour of the Cap-Ex/Op-Ex balance which best provided for a solid implementation. In other words, the optimal proportion split between the raw software price tag, and its associated services in terms of days spent being helped (and client committing to themselves) often lumped in with the sometimes nebulous 'maintenance' fees.

Probably worth a mention is the coding/development slant on this. Brooks' Law [previously noted in 2007 & 2018] states;

"adding manpower to a software project that is behind schedule delays it even longer".

Should you be helping people buy an established item, then you'll no doubt have empirical evidence as to the usual time taken for returns to flow once ordered. As well as the levels and type of assistance allowing this to most smoothly and successfully run.

Whether it is your customer's first rodeo may well be an extra axis to apply.

Solution sellers can be reluctant to have these conversations up-front.

Despite often moving on from the huge initial outlays of the past, the services and subscriptions of today's arena can swell to distract buyers from seeing the true and aligned payback.

Which requires principled selling of that which you duly remove and as such leave them appreciably and desirably much better off.

Occasionally you'll get the enlightened buyer. Spot them through such enquiries as, 'what's my commitment gonna be then?'

No matter how much all vendors in this space may say they provide the vaunted 'plug 'n play' solution, working wonders 'straight out the box', no experienced buyer will take that on face value.

So best to have your data from other clients to hand. Be able to frame it in the most attractive way, uniquely tied to the purchaser's hopes and provide some level of layers from which can be chosen the ideal to snugly fit.

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