[TriLUG] OT: Developer Rates

[Mike M]

On Thu, Apr 22, 2004 at 03:44:39PM -0400, Ken Mink wrote:
> It's a fairly
> simple server app. I figure about 80 hours of work.

How much do you want total for the job?  The prospects eyes
will go the bottom line first.  The rate doesn't matter so much
after that.  The rate matters for return work though.

How badly do you want the job? (discount)

Any network or reference opportunities? (discount)

If it's commodity type work then 20-50 per hour.  If it's specialty
work then higher.

Hourly rates are for charging.  You don't actually work those hours.
What actually constitutes "work"?  You could be drinking wine on
your patio and thinking about the job - that's work.

Here's what I do:  Roughly estimate what I think the prospect
will pay for the job.  Estimate the price competitors will offer.
Estimate the degree by which you may miss the mark. Now you
have the number.

What rate do you want to be known by?  Pick the rate.  Divide the
number above by the rate to get hours.

Sometimes I will estimate the hours by my rate and look at the 
number to see if I think the prospect will pay that number. Then
I'll nudge the numbers up or down.

You can quote a price and than apply a discount to keep your
rates above a level that's important to you.

When you quote hours X rate, you are actually quoting flat cost.
If you miss your mark, your rate goes down effectively.  Sometimes
folks will realize this and give you a bump, but don't count on it.

Got any sweeteners to convince the prospect to take your bid?

It's like playing poker, eh?  

-- 
Mike

Moving forward in pushing back the envelope of the corporate paradigm.