[consulting] Gouging Stupid Clients

[Alex Pavlovic]

Hi Jamie,

You must be very good with estimating large and complex projects if you can give fixed quotes like that. What if the project 
goes over your estimated budget? Do you re-negotiate it or simply do the work for free? We found that for large projects it 
is normally best to work with client on an hourly basis, so it's fair to both parties and ensures precise billing is done. There 
is lot of unknowns when dealing with large and complex projects. Requirements may also change during the development 
phase which furthmore complicates the fixed price approach. However a rough quote or price estimate can be given to the 
client so they understand what the ballpark figure may look like before you start the work.


Thanks.

On Thursday 23 February 2012 09:00:07 Jamie Holly wrote:
> I actually try not to discuss hourly rate with clients with the
> exception of consultation. Instead I bid on a "per job" basis. This is
> actually they way the field seems to be moving. I've actually been doing
> this for close to 10 years now and clients seem to love it. My decision
> to go this route was based upon the flat rate style billing we did in
> the appliance repair industry when I owned a business there. If clients
> ask about it I just explain that my bid was based off a number of
> factors. You aren't just paying for what I do, but also my knowledge and
> experience. Also what if I'm out for a drive or in the shower and a
> project is in my mind and I'm laying out the foundation or solving a
> problem in my head. Should I start billing for that time, even though
> I'm not technically at my desk pumping out code?
> 
> What I also do is if a project turns out a lot easier than I initially
> thought I don't have any problems knocking some off the final bill.
> Clients LOVE this. Actually I've had quiet a few that took the savings
> and wanted me to do something else that cost more than the savings, so I
> ended up making more money in the long run.
> 
> Now mind you that is all on big projects. For small things, like "hey
> can you fix this problem we have in our code", then I do bill at a
> straight hourly rate. They are billed a minimum of one hour and then
> each additional time is billed in 30 minute increments.
> 
> The key to success is building a good and trusting relationship with
> your clients. At the same time you don't need to disclose everything to
> them. When you go to the grocery store, they don't put an itemized list
> of all costs associated with getting that gallon of milk onto the
> grocer's shelves; they just charge you the final price. Our business
> should be the same way.
> 
> 
> Jamie Holly
> http://www.intoxination.net
> http://www.hollyit.net
> 
> On 2/23/2012 11:26 AM, Fred Jones wrote:
> > OK the subject is exaggerated--that was just to get your attention. :)
> > 
> > I recently spoke with a client who told me his woes about how he had
> > to wrestle a site away from unscrupulous site builders who built and
> > hosted it and charged exorbitant fees for any change to their
> > (hard-coded HTML) site. He was looking for assistance with his new
> > rebuild in Drupal. According to what he claims, I think his
> > organization was gouged previously.
> > 
> > Now I have a client myself who has no understanding whatsoever about
> > what I do. When they ask for a change (and I even ran a training
> > session with them (twice) to tell them how to do little things
> > themselves, but anyway they like to ask me) they ask how much time it
> > will take and what's the price. Usually I say it looks like a half
> > hour job and so I will charge you for a half hour. I don't want to
> > discuss rates here, but let's just say my rate is 100 Yen per hour. So
> > I charge them 50 Yen.
> > 
> > But I realize now that if I would say two or even four hours, I am
> > fairly certain they wouldn't flinch, and even if they did, I could
> > whip out a few big words and explain why it's complicated and they
> > would accept that. They would then pay me four hours for a half hour
> > of work. So what I could do, to be honest, is to say, "This will cost
> > 400 Yen" and not mention that it's a half hour job. They don't really
> > care about the time--just the price.
> > 
> > I'm sure others have such clients.
> > 
> > I'm wondering what others think about this. On the one hand, it may be
> > unscrupulous, because no one (not even Lullabot) takes 800 Yen per
> > hour. On the other hand, however, they are willing to pay 400 Yen for
> > this job and the business majors would say "don't leave money on the
> > table." Wouldn't' they?
> > 
> > Fred
> > _______________________________________________
> > consulting mailing list
> > consulting at drupal.org
> > http://lists.drupal.org/mailman/listinfo/consulting
> 
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-- 
Alex Pavlovic - CEO
Taskforce-1 Industries Ltd.
http://www.taskforce-1.com
+1.888.630.5733
Google Talk: beyondcreed at gmail.com