Agree with Roman here.  When I did web dev some time ago,
I started off cheap and even did a couple freebies to
build a portfolio.  Then, I went out with a higher rate, a
company name, and something to show why I felt I deserved
that rate -- ie: past satisfied customers, referrals, and
samples of my work.  Would never have gotten away with
the full rate with nothing to show for it.

Timeframes are variable though -- I don't necessarily put
any minimum timeframes until turning a profit etc.

Cheers,
-Neil.


-----Original Message-----
From: pic microcontroller discussion list
[mailto:PICLIST@MITVMA.MIT.EDU]On Behalf Of Roman Black
Sent: Monday, June 17, 2002 10:18 AM
To: PICLIST@MITVMA.MIT.EDU
Subject: Re: [OT] How to price freelance work...


John Dammeyer wrote:
>
> So remove yourself from the personal issues of being a good guy or
> developing a reputation so you sell yourself short.  The only reputation
> you may get is that you are someone who works cheap while others reap
> the benefits.

> > -----Original Message-----

> > Well I have a client who wants a bid for a project.  The design is
> > straightforward, it is half-clone & half-modernization/update of an
> > existing product that I'm very familiar with.  Sorry for the vagueness
> > but there is an NDA involved.
> >
> > Now he needs a revamp of this thing for use with other stuff in a
> > "packaged kit" that he will sell.  This is a critical piece of the kit
> > and there is no reasonable currently-existing alternative.  He has a
> > small line of various products (that he doesn't manufacture, he's the
> > retailer) into a niche market for years and knows his
> > audience well.


Hi Jesse, I will take the opposite stance to John above
and suggest that since your consulting business is a
start-up venture you should be working as cheap as possible
(ie NO profit!) until the business has built some type of
customer base.

I completely disagree with the advice to charge the "full"
rate with any startup business. When you start a business
you should be fully prepared to run the business at a LOSS
for the first 12 months minimum, with very low prices to
establish a customer base and assure future income. When you
get to the point when you have TOO MUCH incoming work, then
gradually increase prices etc until you reach the status
quo you desire. And for that reason I suggest NOT giving up
your day job, you will need some income over that first 12
months while you get the business established.

NEVER start a busines with the expectation of making money,
at least not straight away. Always ask, "how many hours and
how many $$ can I sink into this business over the first 12
months??" and if the answer is less than 20 hours per week
(while you are still working full time elesewhere) and less
than $100 USD per week (the reason you are still working
full time elsewhere) than you are destined to fail.

So my suggestion, if you are really interested in making
this new busines work, is quote very low (ie UN-profitable)
and do the job while still working full-time. If you do a
decent job you will reap rewards later when sales occur.
Do the same for all jobs in the first 12 months. If you
make it that far then consider giving up full time
employment, provided you have saved a decent ($10G?)
buffer. :o)
-Roman

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