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Future-proof your quotes

14 Jun 2006

Quoting is one of the toughest things to do. This is especially true when you're starting out on your own for the first time. A lot of times new freelancers will start dropping the prices of their quotes in order to get their business rolling. What happens when you've been around for a while, your time is getting shorter as your client list grows?

Most web designers and developers raise their rates at this point. Excellent idea. This is also a good way to drop the bottom portion of your client list — the bottom portion consisting of the lower paying clients or the clients that give you very little work. The trouble happens when you've got a good client that gives you regular work and has been around for a long time.

Because you've had this particular client for a while they can almost predict your rates and what your quotes will generally be worth. This makes it very difficult for some designers and developers to raise their rates. If you just raise them regardless and start quoting differently, this client will notice what's going on and that generally brings on confrontation. This is where future-proofing your quotes comes in handy.

How to future-proof your quotes

The first step, is to not give out specific information on your hourly rates. It doesn't matter if you're only charging $5/hour for a project, keep it to yourself. If a client knows what you're charging hourly from the first quote they will start doing the math for you. Before you know it they will only start asking you how long a particular project will take and they will give you your own quote.

Along the same lines, try to avoid giving out hourly totals as well. If a client can do the math based on your hourly rate they sure as heck can do the opposite based on the hours. It's important to remember to give the client a timeline, just not a specific amount of hours.

Some clients like you to print out specific line-items on quotes when they are submitted. The best thing to do in this scenario is to list all your line-items but only provide a final price, inclusive of all the line-items listed. Should the client come back to you to negotiate you can start removing line-items to meet the budget they have. Both of you walk away happy.

Why future-proof your quotes?

I've found the biggest reason to future proof your quotes is the complexity creep. As a client gets more and more comfortable with you they will start asking for bigger and better things. Often they won't understand how complex an idea is and just assume that since the last project only took 15 hours at $25/hour this one will be the same.

Another reason to future-proof your quotes is to account for hand-holding. Every web designer or developer has at least one client that needs to be lead, by hand, through every step of the process. If you've taken the time to future-proof your quote, the next time you work with that client you can add in a little extra for the added service you're providing.

Finally, by future-proofing you can avoid the death trap that is known as price lock. This often happens when one of your clients is very chatty about how much you charge. Mr. Chatty-client is good friends with Mrs. Potential-client — I think they may even be cousins actually — and he likes to tell her all about how little he's paying for all of this work you're doing.

So Mrs. Potential-client asks you for a quote to which you carefully oblige. Problem is, Mrs. Potential-client comes back and says, “Mr. Chatty-client said you only charge this much, why are you charging me more? I think I'll just go somewhere else.” Good-bye new client and hello price lock.

There are other ways

Of course, there are dozens of different ways to deal with these issues. It all comes down to what you're comfortable with and what fits your personality the best.

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