Help request - Pricing

[Andrew Cameron]

I have designed, developed and deployed a web application (PHP & mySQL) for
a client which records the time spent on specific projects and the relevant
activities for each chunk of time. It all works (CSS-based layout for
Intranet running IE5+) and it produces tables, graphs, invoices including
expenses and all that good stuff, so that their way of working hasn't
changed so much that they can't use it but it is far more efficient and
invoices will be sent on the 3rd of the month instead of the 25th of the
*next* month. This system saves them a lot of time.

There's a hierarchy of users, and project managers can view real-time data
about who is working on their projects. There are mechanisms in place for
security and to make sure that nobody can mess things up unless they have
admin access and really, really want to mess things up. There are various
tools to help fix mistakes and make sure that invoices don't get produced if
they haven't been approved. The system stops at invoice production and
allows the resident accountant to copy the produced invoices into a word
(for example) document so that the rest of the financial details can be
streamlined with the accounting package (this was by client request - the
system is capable of producing final invoices and could be extended into an
accounts package but we decided not to go there...). It's all pretty funky,
and as I said it's going to save them about 3 weeks of work per month. I've
really enjoyed building it since it's been my first project. The problem
is, that since it's been my first project I don't know what to charge.

They're now asking for a price, and I have no idea. I must have done about
300 hours of work on this project, the last 20 or so of which was on their
premises (deployment environment by that stage was the best place to develop
the system) so how much does that equate to in the real world? Thanks for
any help.

 

[Disco Octopus]

Andrew Cameron typed:
.......

I must have done about 300 hours of work on this project....
....so how much does that equate to in the real world?

Not sure, but in this world, you should put a dollar value on your single
hour of work, and multiply that by 300...

IE. if you are worth 10 per hour, then $3000 is what you charge. if you are
worth $150 per hour then you should charge $45,000.

 

[Phillip Roncoroni]

I have designed, developed and deployed a web application (PHP & mySQL) for
a client which records the time spent on specific projects and the relevant
activities for each chunk of time. It all works (CSS-based layout for
Intranet running IE5+) and it produces tables, graphs, invoices including
expenses and all that good stuff, so that their way of working hasn't
changed so much that they can't use it but it is far more efficient and
invoices will be sent on the 3rd of the month instead of the 25th of the
*next* month. This system saves them a lot of time.

There's a hierarchy of users, and project managers can view real-time data
about who is working on their projects. There are mechanisms in place for
security and to make sure that nobody can mess things up unless they have
admin access and really, really want to mess things up. There are various
tools to help fix mistakes and make sure that invoices don't get produced if
they haven't been approved. The system stops at invoice production and
allows the resident accountant to copy the produced invoices into a word
(for example) document so that the rest of the financial details can be
streamlined with the accounting package (this was by client request - the
system is capable of producing final invoices and could be extended into an
accounts package but we decided not to go there...). It's all pretty funky,
and as I said it's going to save them about 3 weeks of work per month. I've
really enjoyed building it since it's been my first project. The problem
is, that since it's been my first project I don't know what to charge.

They're now asking for a price, and I have no idea. I must have done about
300 hours of work on this project, the last 20 or so of which was on their
premises (deployment environment by that stage was the best place to develop
the system) so how much does that equate to in the real world? Thanks for
any help.

There was no discussion of price prior to building the application?

 

[Hywel]

They're now asking for a price, and I have no idea. I must have done about
300 hours of work on this project, the last 20 or so of which was on their
premises (deployment environment by that stage was the best place to develop
the system) so how much does that equate to in the real world? Thanks for
any help.

Why didn't you agree this beforehand? Why not?

At 300 hours that's a high-value project - did it really take 6 weeks,
full-time? If so, then the cost should be 300 x your hourly rate. It's
possibly too late to hit them with a figure such as $20,000, though.

 

[Tina - AffordableHOST.com]

I have designed, developed and deployed a web application

The problem
is, that since it's been my first project I don't know what to charge.

They're now asking for a price, and I have no idea. I must have done about
300 hours of work on this project, the last 20 or so of which was on their
premises (deployment environment by that stage was the best place to develop
the system) so how much does that equate to in the real world? Thanks for
any help.

At this point, it doesn't matter. You basically have to ask them how much
they think its worth and bite your tongue and say "thank you" when they give
you some ridiculously low number. Consider it a learning experience and
next time GET A SIGNED CONTRACT UP FRONT!!!!

Would you ever take your car to a mechanic and say "just fix it and I'll pay
whatever you charge me"? No, you'd get a price quote UP FRONT.

--Tina

 

[Tina - AffordableHOST.com]

Andrew Cameron typed:
......

Not sure, but in this world, you should put a dollar value on your single
hour of work, and multiply that by 300...

IE. if you are worth 10 per hour, then $3000 is what you charge. if you are
worth $150 per hour then you should charge $45,000.

He probably can't charge anywhere near what its worth. Mainly because any
company willing to fork out that kind of money would have wanted everything
in writing and a solid price quote before the work was even started. At
this point he is pretty much at their mercy. He would do well to accept
whatever they pay him and consider this a valuable learning experience.

--Tina

 

[Joshua Beall]

As others have pointed you, you *really* should have agreed to this ahead of
time.

If I were you, though, I would really fight to get at least $6000.
300hr($20/hr)=$6000, and $20/hr is a *really*, *REALLY* good hourly rate for
a project like you described. But, as others have said, you really don't
have much a choice at this point - I mean; you basically either take what
they offer, or walk away with nothing. :-(

 

[Augustus]

I have designed, developed and deployed a web application (PHP & mySQL) for
a client which records the time spent on specific projects and the relevant
activities for each chunk of time. It all works (CSS-based layout for
Intranet running IE5+) and it produces tables, graphs, invoices including
expenses and all that good stuff, so that their way of working hasn't
changed so much that they can't use it but it is far more efficient and
invoices will be sent on the 3rd of the month instead of the 25th of the
*next* month. This system saves them a lot of time.

My first thought in reading your post was the same as everybody else's: You
should have agreed upon a price at the start (Its funny to a degree since
you say they have project managers and such you've been working with, yet
none of them brought up a budget or timeline for this?).

Now its going to be hard to go in and quote them anything... if you go cheap
and say "$10 an hour, 300 hours, that equals $3000" and they still balk at
the amount do you just start slashing the price until they finally say "Ok"?
or do you take the program and walk?

If you go with a more normal rate... $20-30 an hour, it might be a shock to
their system if they budgeted alot less for this and are now his with a
$6000-9000 bill.

What I did want to suggest was:
From the description it sounds like you wrote a pretty decent program
overall and put alot of work into it. Since you don't have any contracts
with these guys what you might do is just keep it on that level (no
contract, other than a "handshake" agreement) so that you can maybe sell it
to them at a loss and then go and sell it to other companies

The thinking is that if you value your time in this project at $10,000 and
they are only willing to pay $2500... then maybe other companies will pay
$2500 as well. If you can get 3 other companies to buy it at $2500 you
recouped your $10,000... more than that and you're making a tidy profit for
your time

I'm thinking back to my company... we had a client a couple of years ago who
wanted this big courier/selivery software package ($25,000 US), but being a
small company they couldn't afford that price. They wanted us to pretty
much recreate that software with as many features as we could for $5000...
in the end we wound up putting in about $20,000 worth of time into this
thing and recreated about 95% of the features of the other package (and
features from other packages), and then sold it to them for the requested
$5000... and then went and sold it to a few other companies as well.

So you did make a goof off the start in not getting a rate and budget set up
for your services, but you might still be able to salvage the situation in
the long run.

 

[Default User]

At 300 hours that's a high-value project - did it really take 6 weeks,
full-time? If so, then the cost should be 300 x your hourly rate. It's
possibly too late to hit them with a figure such as $20,000, though.

It's a bit hard to say just from the information at hand. He says it's
his first project. How many of the 300 hours was him learning to do site
development? Did he already know how to program in PHP and develop MySQL
databases? How many hours would an experienced designer have taken? You
can't just take the number of hours thrown at a job, you have to know
whether they were quality hours.



Brian Rodenborn

 

[nice.guy.nige]

I have designed, developed and deployed a web application (PHP &
mySQL) for a client which records the time spent on specific projects
and the relevant activities for each chunk of time. [...]
They're now asking for a price, and I have no idea. I must have done
about 300 hours of work on this project, the last 20 or so of which
was on their premises (deployment environment by that stage was the
best place to develop the system) so how much does that equate to in
the real world? Thanks for any help.

As others have said, you should have agreed this with the client before work
commenced.

You may find the following useful:
http://www.allmyfaqs.com/faq.pl?Web_design_business

Have a good read of that, and good luck extracting whatever you can from
your client!

Cheers,
Nige

--
Nigel Moss.

Email address is not valid. (e-mail address removed). Take the dog out!
http://www.nigenet.org.uk | Boycott E$$O!! http://www.stopesso.com
In the land of the blind, the one-eyed man is very, very busy!

 

[Andrew Cameron]

Sorry guys, I should have been a bit clearer. I am "temping" at this place
while looking for proper web work although I have been there for the past 6
months. It can be said that they like me. I suggested the project to them
and they liked the idea. I work there every day doing regular crappy work
and they were happy to allow me to show my full skills, hence they aren't
really a regular client. It's a tricky situation, really, since I actually
get on well with most of the people there.

Why did I not get a contract? Because they're not going to screw me over.
They actually do want to pay me what's fair for my time, but I initially
estimated it would take about 50 hours, and we talked about a figure like
£2000 (I'm in the UK) but never decided on anything concrete. The system
spec has changed a lot and there are so many features in it far beyond their
expectations (but nothing that they didn't ask for or approve my suggestion
of).

It's all implemented and this month is the month that people have started
using it properly (so far it's been running like a dream) and since I work
there it would be (a) dickish and (b) unfair to everyone who has given time
to meetings about it for me to just take my ball home and say forget about
it.

So in a way, I'm glad we didn't decide on a number beforehand, because then
I would be going in and saying "well, it actually took 300 hours because the
spec changed" instead of this which is, for all intents and purposes, a
clean slate. It's not even my intention to charge them the full amount, but
they are going to ask their IT people (who are an outside company) what a
fair price is, and we are going to exchange those numbers and have a chat
about it on Wednesday.

If I take the amount of money this system saves them and divide it by 10,
I'd never have to work again. I don't want to not have to work again, and
it's unlikely they'd give me that much, but I'd like to have a good idea
what kind of numbers they are going to be getting from their people before I
go in there. It's all pretty amicable and they even want to arrange a deal
incase they need support after I leave (any suggestions about that also
welcome - they currently pay their IT people (until I turned up, that is...)
£55/hour to come in and fix stuff).

I hope this helps somebody help me - thanks!

 

[Andrew Banks]

300hr($20/hr)=$6000, and $20/hr is a *really*, *REALLY* good hourly rate
for

a project like you described.

$20/hour is a good rate? Are you joking?

 

[Andrew Banks]

Well if the company I worked for had done this job you'd be talking £20k+

If I'd done it freelance you'd be talking £7.5k

 

[Tina - AffordableHOST.com]

over.

No, they probably aren't going to INTENTIONALLY screw you over. People who
don't do programming have no clue what is involved. They think making a
button to click on is simple. They don't understand there are 6 hours worth
of code they can't see.

I don't care if I'm doing a job for my best friend. I'm getting a signed
contract to cover my butt and to make sure there are no unintentional
misunderstandings.

--Tina

 

[Andrew Cameron]

It's a bit hard to say just from the information at hand. He says it's
his first project. How many of the 300 hours was him learning to do
site development? Did he already know how to program in PHP and
develop MySQL databases? How many hours would an experienced designer
have taken? You can't just take the number of hours thrown at a job,
you have to know whether they were quality hours.

They were all quality hours; I consider myself at the very least to be
intermediate level at PHP. Obviously I got faster the more I did, but that
was simply me being more comfortable with the way I had written the system
(module-based). It's the first project of this kind I've been in the
position to charge for, not the first that I've built.

 

[Augustus]

$20/hour is a good rate? Are you joking?

He could mean a good rate for them, not for the developer (thats how I read
it, anyways)

 

[Andrew Cameron]

No, they probably aren't going to INTENTIONALLY screw you over.
People who don't do programming have no clue what is involved. They
think making a button to click on is simple. They don't understand
there are 6 hours worth of code they can't see.

This is true, but I do have someone on my side who is a bit techie (or
techie enough to know that it's not as easy as pressing a button and hence
be impressed at some of the stuff I've implemented).

I don't care if I'm doing a job for my best friend. I'm getting a
signed contract to cover my butt and to make sure there are no
unintentional misunderstandings.

Would anyone sign a contract that said my estimate was 50 hours but that
might actually be 300 because I don't really know yet? How would I approach
someone with that? It's scary stuff from where I'm sitting!

 

[Joshua Beall]

$20/hour is a good rate? Are you joking?

I meant for them (the client) to get the work done at $20/hr is a really
good rate.

 

[Tina - AffordableHOST.com]

This is true, but I do have someone on my side who is a bit techie (or
techie enough to know that it's not as easy as pressing a button and hence
be impressed at some of the stuff I've implemented).


Would anyone sign a contract that said my estimate was 50 hours but that
might actually be 300 because I don't really know yet? How would I approach
someone with that? It's scary stuff from where I'm sitting!

Don't charge per hour. Charge per project. The client doesn't need to know
if you took 1 hour or 100 hours...all they need is the finished, working
project delivered in a timely fashion.

You figure out how many hours you think the project will take you. You also
get EVERYTHING in writing as far as what the project will entail. That
should satisfy both sides. If you under estimated your time/price...then
it will teach you to be more careful next time.

--Tina

 

[P.J.M. Smit]

I have designed, developed and deployed a web application (PHP & mySQL) for

Solution:
You saved them a lot of money for many years to come. Charge only 1 year of
their
saved money and you walk away with enough. Then agree on something like a
percentage
for future savings if they want you to alter things.
Peter