Cost is the main driving factor for all projects. When it is done correctly, it helps in the successful completion of the project. In this paper, the authors have discussed various factors that affect the estimation procedure. These include team structure, team culture, managerial style, project type (core application or integrated application), and client's working environment. Accurate estimation is far difficult in developing countries where most of the organizations follow local standards. These inaccurate estimations lead to late delivery, less profit or in worst case complete failure.