10 Steps to Make a Complete Statement of Work

Kasper Nymand
7 min read

Creating a good Statement of Work (SOW) should always be in the interest of both the agency and client. For the agency, the SOW helps to avoid the risk of potential scope creep, while for the client, it provides comfort in knowing what's going to be handed over to them at the end, not to mention the price of completing the project.


Summary of key findings

  1. Introduce key stakeholders and the project. The client, the agency, any any third-party stakeholders. A brief introduction to the project is usually included.
  2. Define the mission of the project. What is the problem that needs to be solved, and who are the end-users of the deliverable?
  3. Set the project requirements. Based on the mission, the project requirements are defined.
  4. Define the scope. What is in-scope and what is out of scope for the project?
  5. Initiate the project and set a deadline for deliverables with attention to your total capacity, capacity for each role needed, and the schedule. Using a business management platform can be of great assistance.
  6. Allocate key resources with attention to capacity limits, availability, and the schedule.
  7. Manage the roadmap with the scope, start and end dates, and the capacity available for your project.
  8. Define terms of payment and due dates to ensure everybody is on the same page.
  9. Set special requirements if anything is needed apart from what is previously defined in the SOW.
  10. Accept and sign the statement of work and start working.


The Statement of Work (SOW) defines the project, including the mission, the scope, basic requirements, a thorough outline of tasks to be completed, start and end dates, critical resources needed, milestones and timeline, terms, and most importantly, a signature from both parties. The agency, the executing team, and the client should all know what's precisely agreed. SOW is a means of understanding.


Create a well-defined Statement of Work

1. Introduce the project

You always begin the Statement of Work (SOW) with an introduction. This section introduces each key stakeholder in the project, i.e., the client, the agency, and third-party stakeholders, if any. The introduction is also where you briefly define the project and the work that needs to be completed. Addition to this, as this is a formal agreement, both parties should know what they agree to by signing the SOW.


Key takeaway: Introduce the project and the stakeholders in the project, and ensure that the client understands that the SOW is a formal agreement.

2. Define the vision

A SOW should always include a vision or purpose of the project. The vision is a great way to create goals and is an opportunity to set achievable expectations. The vision can touch on what is expected to be delivered? What is the goal of the final deliverable? Who is the end-user, and how do they want to use it? What problem should the project solve?


Moving on from this step, the mission or how we're going to deliver on this vision will be defined.

Key takeaway: Ensure the mission is set and that everybody understands and agrees on the nature of the deliverable. Which problem needs to be solved, for whom?

3. Set the project requirements

What are the main foundational requirements of the project? Referring back to the mission, what problem should the deliverable solve for the end-user? And, how? Make sure you understand each other, and make a list of each requirement. This list is used later in the process to setup the actual tasks, i.e., the scoping process.


Key takeaway: Specify the project requirements based on the mission defined earlier. List the requirements, and saving them for scoping.

4. Define the scope

After defining the vision and project requirements, the next priority is defining the scope. What is within the scope? What is outside of the scope? These two questions are vital points to agree upon, define, and setup for the project. This is the foundation for the rest of the planning process. It's essentially when the milestones are scoped out for the project. Not necessarily on a task level yet, but enough to align goals and expectations between the agency and the client.

statement of work

Key takeaway: Set up the scope based on previously defined project requirements. What is in- and what is out of scope? Specify milestones and align with the client.

5. Initiate and set the deadline of the project

Setting start and end dates of a project can seem easy, but not if you want a reliable end date. Time estimations of tasks, capacity available of needed roles, and total cost of the project are all difficult to estimate. However, essential for the progress.

what is statement of work

Using a platform that can assist you in doing these estimations can greatly improve reliability and accuracy. A platform that not only takes all facets of this project into account but one that can accommodate all projects across your company, while connecting them with the resources available to you.

Key takeaway: Project initiation date and deadlines are set based on time, resource, and budget estimations. A business management platform can assist in this process.

6. Allocate key resources

Projects don't just need enough resources, they need the enough of the right resources. Roles, skills of people, and the available capacity are often overlooked. It's important to assess which types of resources are needed for a given project to ensure that a delivery is possible within the set framework. Likewise, this helps ensure a high utilization level.


Utilizing your team to the fullest capacity can be a driving factor for clients to book your company for their next project. If you don't have the right resources, you might not be able to finish the project within the agreed upon SOW. Something to consider, which types of resources do you need for this project? How many hours are required by role, and are the resources available?

Key takeaway: Proper capacity management ensures that the right people are available when needed. Allocation and scheduling of resources can be made with confidence.

7. Manage the roadmap

When you have defined the scope, start and end dates, and agreed upon the available resources, you can begin to set up the timeline of the project. It's always a good idea to discuss milestones and timeline with your client while you create the SOW. You don't want to end up running outside the perimeters upon which you agreed. With the timeline you will know what milestones should be delivered when and in which order?

dependencies in the statement of work
Key takeaway: Managing the roadmap is done based on the scope, start and end dates, and the capacity available to your project.

8. Specify the terms of payment and due dates

Like any other agreement involving an exchange of money or things, you need to include the terms of how you're going to be compensated for the work you're delivering, i.e., the terms of payment and due dates.


Key takeaway: Include the terms of payment and specify due dates.

9. Include special requirements

Lastly, are there any special requirements needed to be taken into account? This could be special security measures, for example, who has access to the project or who can access databases of trade secret information, etc.

Key takeaway: Any special requirements needed for the project should be included in the SOW.

10. Accept & sign

The document can be signed when all the previous 9 points have been thoroughly defined, read, and understood by both parties. The SOW is agreed upon and signed.


Now, the SOW works as both the formal document and the practical action plan when initiating and implementing the project. It ensures that both parties have established a common ground, understanding, and reference throughout the full life cycle of the project.

Key takeaway: Ensure both the client and the project team understands and agrees upon the SOW and sign the contract.

Key takeaways

Having a well-defined Statement of Work (SOW) in place is the first stepping stone to running, executing, and delivering a successful project. A project that can be delivered on time, in scope, and within the budget. The SOW works as reference material during the project. It lists the central purpose of the project and the work that needs to be completed and delivered by the end of the project. This is all agreed upon through signing the SOW.

For full transparency and understanding between agency, team members, and the client, everybody should know what is agreed upon in the SOW. Setting up the SOW should be a collaborative effort as the SOW is a means of understanding.

The SOW is additionally to that also a method to, apart from knowing what is agreed on to be completed, also a way to know what was not agreed on. This is a way to avoid potential scope creep. Scope creep is the act of taking on more work than what was initially agreed upon. In other words, extra "unpaid" work is sneaking up on your time.

As the next step, you'd probably like to learn the principles of utilizing the Statement of Work for project managers and team members. Click on the image below to read more.

how to use the statement of work during your project


Other articles related to this subject:


Create Intelligent Project Plans in Seconds with Auto Schedule.

See video

Subscribe to the Forecast Blog