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what's been recommended on other lists at other times is that you set a
total price that gives you a good hourly rate plus a significant margin.
Then at the end of the contract, figure out what the price would have
been based on the hours you actually worked, and return the surplus,
explaining you managed to do it cheaper than you thought you would be
able to. I don't know how this works in practice, but it's always
sounded both ethical and sensible to me.
>
*splutter cough cough* What? Return money on a fixed bid? Uh, no.
As I see it, there are basically two ways Bonnie can go about this
project: hourly and fixed price. Ask just about anybody on this list,
and you'll probably be strongly urged to do it hourly. Hourly is
certainly much easier and less risky, but fixed price can be more
profitable. It can be way less profitable, too, if you're not careful.
With an hourly type of bid, you're still going to need to come up with
an estimate. You agree on an hourly rate, get an idea of what the client
wants, and take a shot in the dark at what the cost is. If you've done
this type of work a lot, you can charge a high hourly rate, and give
more confidence in your estimate. If you don't have a good idea of how
long it's going to take you (because of your speed at doing the tasks,
not because of waffling by the client) I'd quote a slightly lower rate
but tell them not to trust your estimate. A convenient way of doing this
is providing your estimate not as a single figure, but as a range--"To
do a web site of 30 pages, with four different types of pages, will take
me about 100 to 150 hours... Towards the lower end if all the content is
ready for me to makr up, towards the higher end if I have to do a lot of
graphics work..." Make the range narrower as your confidence in your
abilities and your confidence in your client increases.
With an hourly agreement, your client takes on all the risk, and you
have very little risk, at least as far as the scope of the project is
concerned. They can make as many changes to the project as they like,
you don't need to know up front all of the details, it generally is a
much more flexible, and much cheaper (for them) way to operate.
Some clients, though, want a product, and they need to know how much it
costs up front. If you want to do a fixed bid, all of the risks fall on
your side. There are some clients I'd never do fixed bids with, but if
you feel confident that you can deliver something to their satisfaction,
a fixed bid can be very profitable.
For a fixed bid, I take the highest figure I think this project will
take, accounting for all eventualities, and double it. Then maybe add a
little more for good measure. You should only do this after you've done
several similar projects and have a lot of experience (unless you're
willing to work for peanuts!). To minimize the risk, you need to be very
specific about what you are going to deliver, and how many changes to
your original scope you will accept without billing extra. For large
projects, you might want to do a two phase bid: first set a price for
developing the proposal, which in the case of a web site involves
prototyping the design, determining how much content is available, and
defining what code bits are to be built. Only after you've gone through
the discovery do you bid on the project itself.
A lot of places like to operate this way. They don't want to have to
think about all this stuff, they just want a web site, and they want to
know how much it costs in advance. This can be very profitable if you're
careful and experienced. If you're not, what you thought would be a 40
hour project may stretch on to 250 hours, and your net hourly rate drops
accordingly.
On a fixed price bid, you take all the risks, and you keep the
compensation for it. Your clients aren't going to pay extra if you
underbid the project. Returning cash may make you feel good, but I can
assure you that your clients aren't returning cash to their customers
just because they made a profit...
Now if you want to do a job for a non-profit, provide your services for
charity, that's an entirely different matter...
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