How to Estimate Hours for a Project: Realistic Techniques & Tips

When a client asks you, "How long will the project take? Can you give me a specific time frame?", your only answer as a Project Manager should be:

Can I get back to you in a few days (or weeks)? I need to assess the project requirements, our resource availability, and potential risks so I can provide you with a realistic and accurate time frame.

You know I’m right about this.

And, as a PM, you also know that estimating time for tasks is challenging.

Small projects take 24-48 hours for initial estimates.

Medium ones can take 3-5 days, so you can properly review all the project requirements and assess resources.

Large projects require 1-2 weeks (or more) for detailed evaluation and planning.

And the most shocking thing about project estimation is that it involves ALL stakeholders.

If we're talking about software development projects, time estimation affects the Product Owner, development team, and QA team, as well as the DevOps team, UX and UI designers, clients, and users.

Time estimation carries so much weight because it affects a project's quality and client satisfaction, ultimately conditioning your company's success and reputation.

Knowing that the clock is always ticking, urging you to hurry with the estimation so clients don’t turn to other businesses for help, balancing speed with accuracy is a must. As a PM, you have to deliver reliable, timely estimates to maintain clients’ trust and loyalty.

To help you avoid relying on guesswork for project estimation, we've created a step-by-step guide with realistic tips and tricks for creating a reliable project schedule.

In this article, we dive deep into how to estimate hours for a project, including practical techniques for better estimation. So, buckle up—it's going to be a bumpy yet pretty fun ride. 🙂

But first, why is time estimation important in project management?

Simply put, it's a somewhat reliable forecast for a project’s duration. Clients like to stick to and rely on this timeframe.

It allows you, the Project Manager, to plan for the future and share a realistic timeline with clients before you commit to delivering their product.

But estimation is not magic; you can’t swing a magic wand and make time estimation happen.

You need to use proper project planning techniques and skills to be able to give accurate time estimation.

Here are some time estimation methods you can use to calculate project hours.

5 common project time estimation techniques

Use these five methods to accurately estimate how long each task for a new project will take.

#1 Bottom-up and top-down estimating

Bottom-up estimating requires estimating the time and resources for each task and then combining these estimates to create a total project estimate.

It allows you to break the project into detailed, manageable tasks, determine the time (and resources) for each, and add up the individual task estimates to get the total project time.

Top-down estimating suggests creating an overall estimate for a project based on its scope and then breaking it down into smaller units; units can be phases, deliverables, and tasks. To give an accurate estimate, you should use data from past projects (historical data) and rely on your experience as a guideline.

#2 Historical data analysis

Now, let’s talk about historical data.

Consulting previous projects to determine their duration can help you make accurate predictions and timelines for your current project.

In essence, historical data is just what it sounds like: a bunch of numbers with no storytelling context for past projects. However, this data can serve as crucial information on past tasks, events, and circumstances related to those projects.

That being said, this method is purely informative, as it allows you to go through any beneficial data. You can review past projects’ financial reports, logged hours, project documentation, or any other data that can help you create an estimated time frame.

In the project management world, it's often said that gathering historical data is costly and time-consuming. We at Memtime don't believe that to be true, and that's why we created our fully automated time tracker.

If you don't have historical data on time tracking in previous projects, you can start measuring your team's hours today with Memtime. Here's why I suggest you do so:

And another thing.

If using Memtime made you worried about your own or your team's privacy (no one likes being watched like a hawk), Memtime is anything but an employee monitoring tool. Our desktop app stores all time data offline, allowing access only to its users. Meaning, you, as a PM, won't have access to your team's time recordings.

If Memtime sounds like a historical data library you have been searching for, start your free trial today to see how it works. Sign up using your email and download the tool.

And if after a few days you wish your team to start using Memtime, schedule a call with us so you can start a team trial instead.

#3 CPM

CPM (Critical Path Method) emphasizes the importance of the longest task sequence.

The “critical path” is the longest task group that must be completed so the project can be considered a success. It allows you to identify tasks that must be done and estimate time for each of those tasks. The premise behind this method is that non-critical tasks can be delayed (even ignored!), and such delay won’t affect or jeopardize the project’s success.

This method is quite useful because it shows task dependencies, risks, and available resources (or lack thereof).

To create a project outline with CPM, consider the following:

• Earliest start time (ES) for a task,
• Latest start time (LS),
• Earliest finish time (EF),
• Latest finish time (LF), and
• Slack time (the amount of time a task can be delayed without affecting the project schedule).

The calculation is rather time-consuming, so use a Gantt chart to streamline the process.

#4 The PERT method

The PERT (Program Evaluation and Review Technique) method is a comprehensive technique that allows you to:

• Define tasks in a sequence.
• Create an order in which they must be completed.
• Estimate the duration of each task.
• Find the critical path to estimate the duration of a project.

This method isn’t the quickest to complete but it paints a detailed picture of each project. It’s a reliable and widely used technique.

#5 The SME method

The SME (Subject Matter Expert) method suggests you don't need to estimate time by yourself. It's the opposite; it's highly recommended that you speak to experts who have worked on similar projects so you can get insights into their knowledge and experience.

When I say "speak to experts", I mean your colleagues and teams. The more people you reach out to, the better, so you can listen to their ideas (for improvements) and understand concerns. Doing so will switch your focus and attention to potential issues that have extended project duration and give you an outline of how long the project may take.

Here are a few guidelines for using the SME method properly:

• Engage with experts via interviews, meetings, or workshops to discuss the tasks in detail.
• During the sessions, ask the SMEs to provide their estimates and reasoning based on their experience.
• If multiple SMEs are consulted, you need to average their estimates to be able to define optimal project hours.
• Review the aggregated estimates and adjust based on additional project information and context, such as risks, uncertainties, and constraints.

By leveraging these 5 techniques from the list, you can improve your project time estimation accuracy and ensure successful project outcomes.

How to estimate hours for a project一the foolproof way

Now that you are familiar with the most effective time estimation techniques, let’s tackle the big question: how to accurately estimate time for a project?

I say follow these seven steps, incorporating the methods we’ve discussed.

Step 1: Divide the project into (smaller) tasks

Once you have a detailed project scope, think of it in terms of tasks. Then, write down smaller tasks that will fit into your team’s schedule.

And if you ever doubt how small the tasks should be, think of the project as a journey with critical steps. Larger tasks can be divided into sequences, while smaller ones can be grouped into a single, cohesive task. This will help fit the tasks neatly into your team’s schedule.

Step 2: Consult your team

As the SME method suggests, it is always beneficial to have support when estimating project time. But, in this second step, you only need to reach out to your team to see how much time other projects require of them and how they would estimate the tasks you defined in Step 1.

The second step can also be considered as pausing to review project steps, onboarding your team and asking them for an estimated time frame.

Step 3: Define time estimates (using collected data)

This step is crucial; it suggests giving the estimated time required for project completion.

You need to establish time estimations for every single task, no matter how quick to complete or complex they are.

If you ask me, this is the perfect moment to consult Memtime and rely on past time tracking data.

Step 4: Review time estimates

Before finalizing your estimates, review them carefully.

Why?

Because you most likely forgot to add additional time for unforeseen accidents and events.

Think of that extra time as a safety net in trapeze flying; you can always count on it to catch you when your acts (a.k.a. project) become more daring and dangerous than anticipated.

Step 5: Create schedules

Once you have defined time frames for each task and a full project, organize each into your and your team’s schedule.

And if you sometimes get lost in your tasks, divide them into two groups: the ones that require your expertise and those that you can delegate.

Step 6: Review time estimates (and project) one more time

Projects are unlikely to be completed within the hours you estimated. Accidents happen, and obstacles tend to prolong project completion.

But even though you know it probably won’t be done on time, schedule time for project revision before you and your team dive into tasks. As they say, measure twice and cut once. You can never be too sure about your project estimates, so please double-check the use of your project resources before starting to work on a project.

Step 7: Compare planned and actual delivery time

Every project should serve as a lesson, an example of what could have been done better.

So, once the project is completed, mark the delivery time and compare it to the planned time. Surely, there will be some difference. No matter how big the difference, it is up to you, the PM, to discover why planned and actual delivery didn’t match and document the reasoning for future reference.

Comparing planned and actual delivery times and finding the reasons behind the difference will help you plan more realistically for the following projects. Documenting these insights will improve future estimates and provide valuable historical data for other project managers.

Final tips on how to estimate hours for a project

Estimating project time is like trying to predict the weather with a crystal ball: you'll most likely get it wrong, but it’s worth the effort. 🤷

Jokes aside, here are some final tips that can help you become a pro estimator:

1. Avoid the planning fallacy by underestimating the time it will take your team to complete the project. This "mishap" is usually caused by overlooking historical data and assuming there will be no unpredictable events or roadblocks on the path (also called optimism bias). You can combat both of these planning fallacies by using Memtime to get insight into past project completion and define what must be done in which time frame.
2. Define tasks that must be completed. To accurately estimate a project, you define tasks that are necessary to complete. You can achieve this by breaking down project deliverables into smaller and quickly manageable tasks.
3. Using the PERT analysis, try to understand what time estimation entails by ranking and categorizing tasks within the project using the three indicators: the best-case scenario, the most realistic scenario, and the worst-case scenario. Doing so will help you manage expectations, allocate resources effectively, and prepare for potential delays.
4. Rely on time tracking. During the course of the project, let Memtime work in the background while you conduct meetings and briefings, work on the project itself, and report to stakeholders. Effortlessly measure the time of every activity in each project phase.
5. Allocate time for breaks. Estimating how much time you and your team can devote to each task is important, but it's also crucial to include well-deserved breaks. Don't forget that.

Ready to get your projects accurately estimated?

Becoming an Expert Estimator is the ultimate goal.

When it comes to estimating, you better be on the dot than off the charts, as your proper estimation and reasonable project delivery time can ensure client satisfaction.

That being said, to comprehensively estimate a project, go through the following steps:

And your secret weapon for accurate project estimation? You guessed it: Memtime.

The tool tracks all your activities, logs billable hours, and keeps historical data to ensure you’re not relying on guesswork. With our tool, you can enhance your time estimation skills, avoid common pitfalls, and make both your clients and team members happy. Memtime is there to help you turn wild guesses into accurate predictions.

Give Memtime a go and watch how your project estimates turn from guesswork to expert work. You have nothing to lose, especially since we have a free 2-week trial. 🙂