What should I check in an app studio’s time-tracking and project estimates?
Compare the original estimate for each finished project with the hours actually logged, and look for a pattern. Check that people log time honestly and consistently, and that unbilled work shows up. Projects that always run over their estimate suggest a pricing habit that you would inherit.
Ask for the estimate, the contract price and the logged hours on a sample of finished projects, including a few that went badly. Put them side by side. One overrun is a bad week; the same overrun on every fixed-price job is a pricing habit. See whether the studio learned from it and changed how it estimates.
Then test the time records themselves. Do all developers log hours, or only the ones paid hourly? Are hours entered daily or filled in at the end of the week from memory? Is there a way for the owner’s own time to appear? Studios often underlog the founder’s work, which makes projects look more profitable than they are.
Finally, look at what never gets billed. Support after launch, small favours, extra meetings and rework can quietly eat the margin. Ask how change requests are priced, and whether anyone approves them in writing. Ask what the tool exports and whether you can keep the history after closing. If the figures matter to your decision, have your accountant review them. Ask to see how the owner reviews these numbers during a project, not only afterward. Compare also who estimates, because an optimistic salesperson and a cautious developer rarely agree.
Key takeaways
- Compare estimates with logged hours on finished jobs.
- Look for repeated overruns, not a single bad project.
- Check whether the owner’s own hours are recorded.
- Ask how change requests are priced and approved.
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Sources
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- 01Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 02Business Development Bank of CanadaGovernmentWhat are the steps to buying a business?
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