NYCPHP Meetup

[Brian Pang]

Mark's advise is very sage.

Other things to consider are what you think they can afford and/or what
you can afford to do it for and whether or not there is likely to be any
follow-on work.

To address what you can afford to do it for; i.e. how low can you go;
consider how it impacts your capacity to do other work that might pay a
better rate. If you have nothing to do, need the money and have no other
prospects, doing a project for "not very much money" is a whole lot
better than doing nothing for no money.

I often am in the position to consider whether or not I will receive any
additional work from a client when I am pricing initial jobs for them.
If I am certain that it is a one-off, I will be far less inclined to
give them any price breaks to secure the business. If there is a good
chance that there will be more work coming from them, I will want to
develop the relationship and may consider giving them a lower or more
competitive price so that I can be a prefered vendor for them.

One forty hour job at $100/hour ($4000) is not as valuable to me as two
forty hour jobs at $65/hour ($5200) with the prospect for more work.

I have them over a barrel, I will usually give them my top hourly rate,
because, well, I can. Still, I won't overdo it and ask for $1,000/hour
because they never truly are over a barrel. There's always someone else
who can do it for $500/hour.

In considering what they can afford, you have to examine who they are.
Are they off-broadway actors (notoriously poor) or lawyers (notoriously
well-to-do). Start-up or well-established? Don't price yourself out of
their range of affordability.

Of course, if you can get them to divulge their budget, things get a lot
easier. If not, it can take a very keen sense to arrive at figures that
both parties are happy with.

Always leave yourself open to discussion and review of the feature sets
and price. I try not to allow the client to go ala carte with features,
but often their original requests contain parts of the site that are
very complex to implement and have little ROI. Identify those things,
cut them out and give them a revised quote.


Sorry for the lengthy reply that doesn't directly address your question.
:) Hope you/someone finds it useful.


Regarding your pricing, you need to start by breaking down the list of
features into sub-components.
"Content Management" is way to large to consider on its own.

Next, look at those sub-components and their details, then estimate how
long it might take you to implement (err on the high side, you'll be
glad you did later after returning to this list to seek additional
guidance).

Add that all up, multiply by your targeted hourly rate and add 10%-15%
(this is easy to knock-off later in negotiations without feeling like
you're getting ripped off).


If I were to price this out (not knowing what's involved in "and many
other features...") I would be solidly in the 5-figures range
($10,000-$99,000), maybe more. After all, you did say it was "custom." :)

Brian

> 
> Here are some [probably obvious] thoughts:
>  
> I would suggest thinking _not_ in terms of functionality (e.g. Content
> Management, Groupware, etc.) but rather value.  Bluntly stated, what will
> the _output_ of all this stuff do for your client.  How much money
will they
> save?  How many more prospects will it uncover?  How much faster will it
> increase their cash cycle?  In the perfect world, your invoice should be
> only slightly less than the value all of these combined - the delta
being a
> function of client management...remember (pardon the crude analogy) the
> difference between rape and making love is salesmanship!
>  
>
> 
> 
> Ok i ahve been developing PHP web application for a couple fo years
now but
> they have always been on a volunteer or personal basis.  Now I have a
client
> that wants a custom web application and I am not sure how much to charge
> them.  So of the features that this web application included are:
>  
> Contact Management 
> Personal Appointment book as well as global appointment book
> Resume management
> meeting management
> admin features(Such as adding new users)
> Sending out template based email to well over 100 individuals
> dynamic word document creation
> and many other features...
>  
> This system is replacing other application such as Goldmine, resume
grabber,
> and will also eliminate many steps such as sending emails in outlook.
>  
> if anyone has an idea on how much something like this goes for please
let me
> know.

<snipped a few lines here and there>