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RE: Questions - Going from Hourly to Per Project Basis
Subject:RE: Questions - Going from Hourly to Per Project Basis From:"Sharon Burton-Hardin" <sharon -at- anthrobytes -dot- com> To:"TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com> Date:Wed, 1 Oct 2003 08:33:24 -0700
Since about April 2001, we have had no client want an hourly project. I
don't blame them. Hourly projects seem to just go on and an with no end in
sight. They seem to bleed money. How do you plan your project budget in this
case?
We either bid a flat rate or a bill towards cost.
Flat rate requires me to accurately estimate a project. It has taken me
years to be able to look at a project and know what can be done and how long
it will take. It also requires the scope of the project to be tightly
defined by me. It requires change orders for those out of scope changes that
are going to happen. It requires a clearly defined process for change orders
and an accurate cost for the change order work. It requires writers and
illustrators who work at the speed I know they can.
A bill towards cost makes clients happy because they know that the most the
project is going to cost is X. We bill hourly towards that. Problems can
show up early because we can all see that we are eating up hours and not
moving along. That let's us all see what the problem might be and correct
it. It may be us and it may be them but we can see the numbers and know
there is a problem. All the stuff I said about change orders stands in these
projects as well.
I also lost my shirt early on by not understanding about change orders and
how important communication is with the client about scope changes. Early
on, I also estimated badly and paid more for the project than I made. Ouch
and I am glad I made those mistakes early on. I consider these mistakes like
the cost of a business seminar where I learned valuable thing. I know
several writers who simply do not understand that particular business
seminar point and continue to make the same mistake over and over. They hate
fixed rate projects, for obvious reasons.
If you can accurately estimate, there is no reason to be afraid of either
project. But you have to manage your projects well or you will wind up angry
and resentful, feeling like the client is getting stuff for free.
And all this needs to be in writing with the client signing it. We have
initial places in proposals now for key points the client needs to clearly
understand. You need the writing part if you wind up in court. And always
assume you might. Sad but true.
Andrew's right on the money on this one. I've had several clients who
preferred to know the price for the project up-front, as a per-project bid
gives them a solid set of numbers they can put into their budget. It also
reduces the "sticker-shock" at billing time!
The only thing I would add to Andrew's advice is to be sure to include in
your contract a few key clauses that will protect you (i.e., "revisions of
more than 15% of the content after completion of the first draft may result
in changes to the project timeline and renegotiation of the project timeline
and cost" and/or "delivery date subject to timely receipt of reviews and
content from Subject Matter Experts; delays beyond the specified schedule
may result in changes to the project timeline...etc.").
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