Why We Keep Underestimating How Long Things Will Take

Good planning is not about expecting everything to go wrong. It is about recognising that uncertainty is part of running a business and allowing enough flexibility to deal with it.

Have you ever looked at your to-do list and thought, “I’ll get that finished this afternoon”?

Whether it is introducing new software, recruiting a new team member, improving a process, updating your website or launching a new service, most projects seem perfectly manageable when we first look at them.

Then reality intervenes. A client calls. A meeting overruns. A team member needs support. Priorities change. Before you know it, the afternoon has disappeared and the task you expected to complete in a few hours has drifted into next week.

If that sounds familiar, you are certainly not alone.

We are all more optimistic than we think

Back in 1979, psychologists Daniel Kahneman and Amos Tversky identified what became known as the Planning Fallacy.

In simple terms, people consistently underestimate how long things will take, how much they will cost and how complicated they will become. Even more surprisingly, experience does not necessarily protect us. Despite having seen projects overrun before, many of us still convince ourselves that this time will be different.

The reason is fairly simple. When we plan, we naturally imagine everything going according to plan. We do not automatically allow for interruptions, delays, competing priorities, unexpected problems or the countless small issues that crop up during almost every project.

As business owners, we tend to focus on the destination rather than everything that might happen along the way.

Looking through the wrong end of the telescope

One of the most effective ways to overcome this tendency is to stop looking forwards for a moment and start looking backwards.

Instead of asking, “How long do I think this will take?”, ask, “How long did something similar actually take last time?”

It sounds obvious, but it is surprising how rarely we do it.

If you are considering implementing a new software system, recruiting additional staff, opening a new location or launching a new service, do not just rely on your initial estimate. Think about how long similar projects really took, what unexpected issues arose, which costs were not included in the original budget, how much management time was absorbed and what impact the project had on other areas of the business.

The answers are often very different from the assumptions we make at the outset.

Why this matters for business owners

This is not just an interesting piece of psychology. It has real-world consequences.

Take recruitment as an example. Many business owners focus on the time needed to advertise a role, interview candidates and complete the onboarding process. What often gets overlooked is the management time involved, the impact on existing teams, the learning curve and the support required during those crucial first few months.

Software implementations are similar. The software itself may be installed quickly, but training, process changes, data migration and staff adoption can take significantly longer than expected.

When projects take longer than planned, the consequences rarely stop with a missed deadline. Cash flow can come under pressure. Other priorities become delayed. Teams become frustrated. Business owners often find themselves working longer hours simply to keep everything moving.

What started as an optimistic estimate can end up affecting the whole organisation.

Better planning does not mean being pessimistic

Good planning is not about expecting everything to go wrong. It is about recognising that uncertainty is a normal part of running a business and allowing enough flexibility to deal with it when it arrives.

The most successful businesses are not necessarily those with perfect plans. They are the businesses that review, adapt and learn from experience. They balance ambition with realism, optimism with evidence and growth plans with practical thinking.

They recognise that the unexpected is not unusual. It is part of business.

Sometimes you are too close to the decision

One of the challenges of running a business is that you are often making important decisions whilst dealing with customers, employees, suppliers and the countless day-to-day demands that come with ownership.

It is easy to become attached to your own assumptions because you are so close to the situation.

That is often where an experienced business adviser can add real value.

A good adviser does not simply provide numbers or compliance support. They bring an independent perspective, challenge assumptions, ask the difficult questions and help you see opportunities and risks that may otherwise be overlooked.

Whether you are recruiting new staff, investing in technology, expanding your premises, introducing new systems or planning the next stage of growth, an outside perspective can help ensure decisions are based on evidence and experience rather than optimism alone.

Sometimes the most valuable conversation is not about what you hope will happen. It is about understanding what is most likely to happen.

At James Todd & Co, we work with business owners to provide that independent perspective, helping them challenge assumptions, test ideas and make informed decisions with greater confidence.

If you are considering a significant business decision and would value an experienced sounding board, we would be delighted to have an informal conversation. 

Business Growth Coaching Tip

When planning your next project, do not just ask yourself how long you think it will take.

Ask how long similar projects have taken before, what obstacles arose along the way and whether you are allowing enough time and resources for the unexpected.

Optimism is important in business. Combining optimism with experience, evidence and objective advice is even better.