What Are Variance Buffers?

A variance buffer is a risk percentage added to each line item in your quote. It accounts for the uncertainty inherent in estimating creative and service work.

The Problem They Solve

Common estimation challenges:

Scope creep and "just one more thing"
Client revision rounds
Unexpected technical issues
Miscommunication on requirements
External dependencies and delays
Learning curves on new technologies

Without variance, you absorb these costs. With variance, they're built into your pricing.

How Variance Works

Basic Formula

Line Total = Base Cost × (1 + Variance%)

Example

Service: Website Design
Hours: 20
Rate: $150/hour
Base Cost: $3,000
Variance: 20%

Line Total = $3,000 × 1.20 = $3,600

The extra $600 protects you if the project takes 24 hours instead of 20.

When to Use Higher Variance

20-30%: Unclear Requirements

Use when:

Client hasn't fully defined needs
"We'll figure it out as we go"
Multiple stakeholders with different visions
First-time working with this client type

25-35%: External Dependencies

Use when:

Waiting on third-party APIs
Client providing content or assets
Coordinating with other vendors
Platform or tool limitations unknown

30-50%: Technical Complexity

Use when:

New technology or framework
Complex integrations
Performance-critical requirements
Security or compliance needs

40%+: High Uncertainty

Use when:

Experimental or R&D work
Vague "build something cool" briefs
Aggressive timelines
Client has history of scope changes

When to Use Lower Variance

5-10%: Repeat Work

Use when:

You've done this exact project before
Using established templates
Same client, same type of work
Highly standardized deliverable

10-15%: Clear Scope

Use when:

Detailed specification provided
Fixed requirements (no changes)
Simple, well-understood work
Long-term trusted client

15-20%: Standard Projects

Use when:

Typical agency project
Reasonable client expectations
Familiar industry and technology
Some unknowns but manageable

Variance by Project Type

Project Type	Typical Variance
Brand Identity	15-25%
Website (template)	10-15%
Website (custom)	20-30%
Web Application	25-40%
Mobile App	30-45%
Marketing Campaign	15-25%
Content Creation	10-20%
SEO/Analytics	15-25%
Consulting	20-30%
Strategy	25-35%

Variance by Line Item

Different parts of a project have different risk levels:

Lower Variance Items

Project management (predictable)
QA and testing (defined scope)
Training and documentation
Maintenance retainers

Higher Variance Items

Custom development
Design exploration
Content strategy
Third-party integrations
New technology adoption

Example: Website Project

Line Item	Variance	Reason
Discovery	10%	Defined process
Design	25%	Creative iteration
Development	30%	Technical unknowns
Content	35%	Client-dependent
QA	10%	Systematic process
Launch	15%	Mostly predictable

AI-Suggested Variance

When using AI quote generation, Tillage suggests variance based on:

Line item description keywords
Project complexity indicators
Industry standards
Historical patterns

You can accept or adjust the suggestions.

Variance Display Options

How clients see variance:

Hidden (Recommended)

Client sees final price only
Variance built into total
Cleanest presentation

Blended

Variance absorbed into unit price
Shows adjusted rate
Professional appearance

Visible (Rare)

Full breakdown shown
Used for transparency requirements
Some government/enterprise clients

Most agencies use hidden variance.

Combined with Profit Margin

Variance and profit margin work together:

Base Cost × (1 + Variance%) × (1 + Profit Margin%) = Final Price

Example

Base: $1,000
Variance: 20%
Profit Margin: 15%

$1,000 × 1.20 = $1,200 (with variance)
$1,200 × 1.15 = $1,380 (final price)

Setting Default Variance

In Settings > Quote Defaults:

Set your standard variance (e.g., 15%)
Applied to new line items automatically
Adjust per item as needed

Tracking Variance Accuracy

Over time, track:

Estimated vs actual hours
Projects that went over
Projects that came in under

Refine your variance rates based on real data.

Common Mistakes

Too Little Variance

Eating costs on every project
No buffer for surprises
Burning out on "small" requests

Too Much Variance

Pricing yourself out of work
Clients question high prices
Losing competitive bids

Inconsistent Application

Some items buffered, others not
Random variance percentages
No system or rationale

Best Practices

Always include some variance - Even "simple" projects have unknowns
Be systematic - Use consistent rates for similar work
Adjust per item - Not all tasks have equal risk
Review regularly - Update based on actual project outcomes
Document your reasoning - Remember why you chose each rate
Don't apologize - Variance is professional risk management

Communicating to Clients

If asked about pricing:

"Our pricing includes a buffer for revisions and refinements"
"We've factored in typical project contingencies"
"This ensures we deliver quality without surprise costs"

Avoid:

Calling it a "risk buffer" (sounds negative)
Explaining the exact percentage
Apologizing for including it

Related: Profitability Features | AI Quoting | Formulas Reference