
So You Think You Can Freelance? - whather
http://blog.grouptalent.com/2012/so-you-think-you-can-freelance/
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tptacek
I'm not in love with any scheme that causes you to resist quoting prices your
clients will understand. They want to know how much the project will cost.
Tell them how much you think it will cost.

There is a huge premium to be captured by consultants simply by _eliminating
the appearance of uncertainty_. Clients pay extra for _perceived determinism_.

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medinism
I agree giving the project owner the appearance of certainty will make him
feel safe and comfortable - however it is not good for them. The longer and
more complicated the project the more likely your estimate will be wrong. So
giving the customer a sense of overall effort is good - misleading them by
telling them you know how much the overall project will cost is bad.

~~~
tptacek
So provide a conservative estimate billed in week-long increments. You come in
way under the wire, they get a week or two deducted from the final cost of the
project. Customer dicks around with requirements, you get to say "I am happy
to do whatever you'd like and make whatever changes you'd like but I need to
remind you that we have a fixed schedule for this project".

All this stuff about "what's best for the customer" tends to be an elaborate
justification for complicated pricing schemes that alienate customers while
ironically _undercharging them_ for the services you provide.

Avoid customers for whom a week's worth of your time is a make- or- break-
the- business decision.

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medinism
Good point. the way I was thinking about it was more like this 1- you provide
an overall estimate on where you think you could come in at. you do this to
give all clarity on how you are thinking about the problem, anchors your
estimate and the functionality you are about to build, and allows the owner to
get a sense of price 2- only commit to a week or 2 at the time. this allows
the client to tweak things, see quick progress, and add or subtract features
as you make progress. Or even stop, test features on customers - and pause.

thoughts?

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tptacek
The customer wants you to commit. When you say "let's do a week at a time",
the customer does a mental calculation of what one week of your time is worth
if the project doesn't complete, arrives at the number $0, and responds
accordingly.

That doesn't mean you work a fixed-price gig. It does mean that you give
serious thought to a conservative estimate of the whole gig and then
confidently offer that as your price for the engagement.

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thibaut_barrere
If I had to give a single tip, it would be "don't do fixed price contracts".

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tptacek
If I had to give a single tip, it would be "don't bill hourly".

The simplest fix for this: give clients proposals that quote an estimated
price for the _whole project_ in units of person/ _weeks_ , and have your SOW
say "time beyond N weeks can be billed at a cost of $X/person/ _day_ ".

~~~
thibaut_barrere
For clients expecting estimates, I tend do these in days or weeks; but these
are still (best-effort) estimates.

~~~
tptacek
Here's my thought process on this:

Most of our projects run in week increments.

We do "a couple day" projects sometimes, and somewhat more commonly do
projects that are longer than a week but don't end on a week boundary.

If I sell you a day of my time, the remainder of the week is then shot for my
more typical N-week projects.

That doesn't mean we round 1 day to a week (nothing is more miserable than
being stuck on a project that "morally" already ended but demands that you
find something to do for the remainder of the time) but does mean we avoid
proposing work that is likely to fragment our schedule.

Now, take that logic and apply it to hours: _none_ of our projects are for N
hours. There's no such thing as a "partial day". Almost uniformly we'll just
do something and not charge for it instead of billing for half a day.

Furthermore, context switching is brutal to hourly schedules. It can take more
than an hour just to mentally switch from one task to another.

So it makes absolutely zero sense to bill hourly.

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Swizec
Really good post, I'd just like to add one more piece of advice:

Don't over-extend yourself. When your paycheck is directly proportional to the
amount of work you put in, it is very easy (and indeed tempting) to take on
more work than you can comfortably handle.

Avoid the temptation. You are no good to your clients if you're always tired.

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ChrisLTD
I really like the idea of charging for 1 or 2 weeks at a time. I'll have to
try it.

