Re: Questions - Going from Hourly to Per Project Basis

[Andrew Plato <gilliankitty -at- yahoo -dot- com>]

"anachie sheakspear" wrote

> - What key questions should I ask?
> - Do I base an estimate on my former hourly rate?
> - What are the pluses and minuses of doing business
> this way?

- Estimate the project based on hours. 
- Pad the project by 30% or more
- Previous hourly rate X estimated hours = project bid

Therefore, if it was takes you 2 months to do a document, assume that a month
is about 200 hours. If you were earning $40 a hour.  (40x400)*1.3 = $20,800.
Require a 40% downpayment of $8320.

You actually can turn relationships like this into profitable ones. You just
need to estimate accordingly. 

Also, spec out the project, deliverables, and timeline. Accomidate for review
time, etc. Be realistic and expect (and anticipate) the time line to slip.
Don't plan on being a hard-ass. If you walk into a project armed for a battle,
you'll likely get one. Plan for last minute changes and problems. They're a
natural and normal part of ANY project. 

In general, per-project consulting is more dangerous. But, if you manage it
well, it can be done. I used to hate per-deliverable work, but in the last few
years I've come to accept it as the norm in many areas. 

> One thing that springs to mind is that they can use
> whatever I bid to find someone cheaper and I'd be SOL.
> Not sure how to quite phrase this one. Also, do does
> anyone out there have experience working on a "per
> project" basis? 

They sure can. And many places do exactly that. We have a county government in
my neck of the woods that did this to us just recently. They solicited bids
from security firms, created a ridiculous deadline and limitations. We busted
ass to deliver a honest bid to them. They turned around and handed the contract
to one of their buddies. Essentially, they used us to pressure somebody else to
lower their bids. Governments, especially city and county governments, are
notorious for doing this. The "good old boy" network is very much alive and
well. We've been screwed on countless "sweetheart" deals where the government
put out an RFP with absolutely no intention of actually considering anybody but
one of the "good old boys.' 

However, if the organization likes you, then they won't do this. You need to
make sure that the "sweetheart" in the deal is you. So that they hand contracts
to you, over other people. That's why its important to have a solid
relationship with contracting managers. If they like you, they'll hand you a
lot of business. 

And yes, its a shame the world works this way. I don't make the rules, I just
bend them to my advantage. 

Andrew Plato 





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