How do yo quote a client?

[Flow]

Hi Guys,

Recently I'm running on my own as an iOS developer. Beside writing my own app, there're always times people ask a quote from me. I don't want to simple accept or reject a client by giving an arbitrary price.

So let's discuss how do you quote a client? I know from a layman's view, counting and pricing by page/tab maybe the most intuitive way to do it.

Any ideas?

Thanks,

Mingming

[Subh]

((Usually by number or man hours * number of resources) + Buffer Hours) * hourly rates.

This can be as simple as this but might differ from individuals to individuals. 

- Subh

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[Andy Marks]

Hi Mingming,

I think there's probably two questions here:

(1) What is the the amount of effort required to complete the task (e.g., the estimated effort)

(2) What price do you want to quote to the client

Obviously the two are interconnected (i.e., if you're bad at doing #1, you're ability to do #2 well will be low).  Which one are you asking for assistance on?

The other thing here is to be very clear about the difference between a quote and an estimate... and make sure the client is equally clear on the difference.  Will save much pain down the line.

Cheers,
Andy

Andy MARKS

Technical Principal

ThoughtWorks Singapore

email: ama...@thoughtworks.com

mobile: +65 9788 0259

web: www.thoughtworks.com

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[Mingming Wang]

Hi Andy & Subh,

Thank you for the reply! Software estimation is ok but the price we quote our client. 

I think do a calculation on man hour estimation * hour rate can be a good beginning. Also need to consider the cost for graphic support. 

Before all the clients are gone once I give them a number...maybe I was just trying to reject them by giving a high price.

Cheers,

Mingming

[Meng Weng Wong]

couple of book recommendations:

for people who run software development houses:

http://www.amazon.com/Managing-Professional-Service-Firm-ebook/dp/B00120955I/

for solo freelancers:

http://www.amazon.com/Free-Agent-Nation-Transforming-ebook/dp/B000FA5SL6/

http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Daps&field-keywords=freelancing

for people who don't know if they want to go solo as a freelancer, start their own company, work for a dev shop, or work for a company:

http://www.amazon.com/Brainfruit-Turning-Creativity-into-ebook/dp/B0069RR0ZG/

[Martin]

And never forget: Just ask for more. You might just get it.

Cheers,

Martin

[Carl Coryell-Martin]

My suggestions:

- start with time and materials with frequent (weekly or daily) delivery of interim features so that you know that you're on the right track.  (Pivotal Labs makes a nice tool to help keep track of stories in this fashion call http://pivotaltracker.com). Clients will freak out about t&m, one approach to solve this is to offer a money back guarantee if they are unhappy with the progress after the first two weeks.

- raise your hourly rate until it makes you ill and people start turning you down. Remember that you won't be able to bill hourly full time so aim for at least a rate where you're comfortable billing 20 hours/week and you should be okay.

- for estimates, break things down into a small pieces as you can, estimate those and then add 15-30% for 'undiscovered scope'.

good luck!

-Carl C-M

[Mingming Wang]

Thank a lot for all the comments. I'll read Brainfruit: Turning Creativity into Cash from East to West although I know I want to do a product company.

I met the client when I was collecting feedback of my demo from potencial customers. He is the one who has started building their own solution and has a budget!  (as said in the customer development method by Steve Blank) 

After got this point just now, I decide to persuade him to use my demo first. 

Thanks all!

[Chew Lin Kay]

Something for the end of the process--at a talk on freelancers' legal rights, and a topic that frequently came up was (non-)payment. The lawyer on the panel suggested that part of the t & c states that full rights for the item commissioned do not go to the commissioner until full payment has been made.

CL

[Mingming Wang]

That's useful, thanks~

On Wed, Jul 25, 2012 at 10:32 AM, Chew Lin Kay <chewl...@gmail.com> wrote:

Something for the end of the process--at a talk on freelancers' legal rights, and a topic that frequently came up was (non-)payment. The lawyer on the panel suggested that part of the t & c states that full rights for the item commissioned do not go to the commissioner until full payment has been made.

CL

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[Flow]

Thank you guys!

[Paul Gallagher]

Another thought - especially when dealing with iOS apps - is that given the established purchasing mechanisms, there's an opportunity to get creative with pricing:

You can consider if revenue share/pay-for-performance makes sense.

If the client is actually going to benefit I indirectly from the app (like in-store sales), it could even be 100/0% split from app sales proposition, with perhaps a minimal fixed service charge.

This could work well especially with SMBs - who would never dream of paying close to market T&M rates. And for the developer there's theoretically huge upside (if you can deliver).

But.. only if you believe in the app's potential, and are willing to essentially go into partnership: you are basically pitching "let me take ownership of your app/online presence, if you give me a stake in the outcome".

Just a tot..
Paul

[Mingming Wang]

Yes, I also quite like this kind of partnerships. The problem is we as developer rarely have control over the number of revenue. The SMBs may be not ready to be frank on this kind of partnerships. Match is a big problem :)  just my 2c.

[Paul Gallagher]

Yeah, I agree Ming Ming. It's not an approach for the faint hearted, and you need to check your natural enthusiasm at the door. Key is to identity revenue factors that you can actually control.

It can be an interesting intellectual exercise even if you never offer the deal tho: if you can't imagine a rev share scenario that could make sense, then you have to wonder if the thing should be built in the first place.

[Martin Bähr]

On Tue, Jul 24, 2012 at 05:40:59PM +0800, Meng Weng Wong wrote:
> for people who don't know if they want to go solo as a freelancer, start their own company, work for a dev shop, or work for a company:
> http://www.amazon.com/Brainfruit-Turning-Creativity-into-ebook/dp/B0069RR0ZG/

ah, i have been wanting to get this book. thanks for suggestiong why it
is worth reading.

alas it seems only available from amazon and we seem to have trouble
using amazon from china. (amazon.cn does not have books not distributed
in china)

hugh totally neglected to advertize the book here,
also i'd love to have a signed copy from him (hint, hint) ;-)

(i can send money (via friends in sg) or make a donation to hsg if
someone can help me get the book)

greetings, martin.
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Martin B�hr http://societyserver.org/mbaehr/

[Mingming Wang]

If you use Kindle, you may pretend you're an US netizen and buy Kindle books.

For me, I'll borrow it in library.

Martin Bähr          http://societyserver.org/mbaehr/

[Paul Gallagher]

yay!

"

This title is not available for customers from your location in:

Asia & Pacific

"

stupid regional distribution dealz rule again.

Hugh, why didn't you put a specific rider in you contract to avoid such stupidity?

*digital downloads*

aargh

On Wed, Jul 25, 2012 at 6:13 PM, Martin Bähr <mba...@email.archlab.tuwien.ac.at> wrote:

Martin Bähr          http://societyserver.org/mbaehr/

[Martin Baehr]

On Wed, Jul 25, 2012 at 09:36:52PM +0800, Mingming Wang wrote:
> If you use Kindle, you may pretend you're an US netizen and buy Kindle
> books.

but the kindle version is almost as expensive as the printed one. in
that case (in any case actually) i prefer print.

greetings, martin.
--
cooperative communication with sTeam - caudium, pike, roxen and unix
services: debugging, programming, training, linux sysadmin, web development
--
pike programmer working in china societyserver.(org|net)
foresight developer community.gotpike.org foresightlinux.org
unix sysadmin (open-steam|www.caudium).org realss.com

Martin B�hr http://societyserver.org/mbaehr/

[Gibson Tang]

If you don't mind paying a bit more. How about vpost?

Martin Bähr          http://societyserver.org/mbaehr/

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Regards
Gibson Tang
www.azukisoft.com

+65 96565537
www.gibsontang.com

[Paul Gallagher]

I just realised it's fucking published by McGraw-Hill Education (*Asia*) (November 17, 2011)

yet they are still not selling the digital edition to *local* audiences.

I rarely get _really_ pissed off, but this got me.

Hugh, are you around the forums here? How did this happen?

[Dave Appleton]

Actually it is a lot about positioning.

Subh mentions hourly rates - but how do you set hourly rates? A lot of developers charge similar rates to those charged by IT maintenance companies…. which is absolutely crazy.

You have to build up their perception of your abilities so that they do not expect you to work for peanuts. At the same time you have to pick your clients. If you are trying to sell an app to a company with inhouse IT but just cannot do apps yet you are bound to have charlie (the young guy just joined) begging to let him try it. That will automatically put a ceiling on their perceived price.

If they are a concrete packing plant and you are doing something mission critical you have to estimate the perceived value to them. The construction, oil and gas etc. biz is used to higher prices and you should start there…..

but don't trust me - I'm broke ;-(