RE: Questions - Going from Hourly to Per Project Basis

[Lyn Worthen <Lyn -dot- Worthen -at- caselle -dot- com>]

Andrew's right on the money on this one.  I've had several clients who
preferred to know the price for the project up-front, as a per-project bid
gives them a solid set of numbers they can put into their budget.  It also
reduces the "sticker-shock" at billing time!

The only thing I would add to Andrew's advice is to be sure to include in
your contract a few key clauses that will protect you (i.e., "revisions of
more than 15% of the content after completion of the first draft may result
in changes to the project timeline and renegotiation of the project timeline
and cost" and/or "delivery date subject to timely receipt of reviews and
content from Subject Matter Experts; delays beyond the specified schedule
may result in changes to the project timeline...etc."). 

While I understand the concerns that have been expressed regarding project
bids, I would never turn down an opportunity to take on/keep a client
because they didn't want me to work on an hourly basis. It will require some
additional management on your part to be sure you don't end up on the losing
end of the deal, but as you gain skill in estimating, you can actually end
up coming out ahead.

p.s. I like Mike O's example of providing the "weekly rate" option.  Great
idea to present to them as an alternative to both hourly and per project.

L

-----Original Message-----
From: Andrew Plato 
Sent: Wednesday, October 01, 2003 8:27 AM

"anachie sheakspear" wrote

> - What key questions should I ask?
> - Do I base an estimate on my former hourly rate?
> - What are the pluses and minuses of doing business
> this way?

- Estimate the project based on hours. 
- Pad the project by 30% or more
- Previous hourly rate X estimated hours = project bid

Therefore, if it takes you 2 months to do a document, assume that a month
is about 200 hours. If you were earning $40 a hour.  (40x400)*1.3 = $20,800.
Require a 40% downpayment of $8320.

You actually can turn relationships like this into profitable ones. You just
need to estimate accordingly. 

Also, spec out the project, deliverables, and timeline. Accomidate for
review
time, etc. Be realistic and expect (and anticipate) the time line to slip.
Don't plan on being a hard-ass. If you walk into a project armed for a
battle,
you'll likely get one. Plan for last minute changes and problems. They're a
natural and normal part of ANY project. 

In general, per-project consulting is more dangerous. But, if you manage it
well, it can be done. I used to hate per-deliverable work, but in the last
few
years I've come to accept it as the norm in many areas. 

...<snip>...

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