Assumptions

One of my clients is converting some of her workshop materials into eLearning.  She wants to reduce her time on the road.

She already has some potential customers and has the funding to create a highly professional course.

During the development of the business plan, we made some early cost estimates based on our combined experience in the space.  Both of us have spent many years creating eLearning, so we were pretty confident in our initial budget.

That confidence was a bit misplaced.

Fortunately, we documented the assumptions we made when we made that budget.

What were our assumptions for the eLearning development line item?

• The course as the client outlined would take about 100 hours of development to convert at approximately $100/hr.
• We estimated the number of hours based on our combined experience doing this sort of conversion
• The cost estimate was on the high range of the going rate for eLearning developers – both the ones we knew and the US Government average scale (so we had a more objective view).

We built in some cost slack within other line items – in case we forgot something. Which, of course, we did.

It helped to have these assumptions clear and written down as we moved from the initiation and planning phases into execution.

What did we miss?

• The cost of developing some videos the client wanted to have in the course.  The initial time and cost estimate was around the course itself. We forgot to include the videos. Worse – the cost of the videos was higher than we even had the slack for.  We are drastically reducing the expected quality to accommodate this miscalculation.
• When we talked to another colleague, he asked about various administrative fees on top of the 100 hour course development.  Since the two of us were used to doing our own course development, and therefore our own project management of that course development, we didn’t add the cost of the project management on the vendor side. Only the project management on our side.
• We did not document the assumption that the course would be developed and run under the initial LLC. The client decided she wanted to develop and run the course as a separate business – so the administrative costs of setting up that LLC, including branding, were not included in the budget.

Having the assumptions made during initiation written down made it a lot easier for us to adapt the plan, the deliverables and the budget.

Beats getting down the path, having to change everything up while in panic mode, running out of money way too quickly and already having clients expecting one thing and getting something of much lower quality.

It’s much easier to make these changes before going into execution vs when you are close to shipping.