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Posted by Shelly on 09/19/07 12:30
"Sanders Kaufman" <bucky@kaufman.net> wrote in message
news:L37Ii.3015$4J3.726@newssvr22.news.prodigy.net...
> Willem Bogaerts wrote:
>
>
>> Also, this situation means that they want to trust you. Don't abuse it.
>
> That's a core reason why I'm a little hinky about this project.
>
> It's the ultimate contractor question:
> "What's the best way to calculate charges - from the cost of production,
> or the value to the customer?".
When was the last time you went into a restaurant? The cost of the
hamburger and fries may have been, say, six dollars. The cost of coke you
wanted with it was $1.79. Do you know the cost of the production to them
for the coke? It was about ten cents -- and even then it is loaded with ice
so the cost is reduced even further.
The point of this is that a product is worth what a consumer is willing to
pay for it. We call that Capitalism.
My first contract with php was one my son (networking business) bid for and
got. He totally underbid it and I wonnd up working for about $3/hr.
However, I viewed it as a learning experience to get into the field and I
was doing it in my off hours. I made up for it with the next customer where
the job was simple and I made more like $125/hr.
I did learn about feature creep from that first customer. What I learned
was this:
1 - Clearly, and in WRITING, document EXACTLY what features will be in the
product.
2 - Document (always in writing) when it will be delivered and the payment
schedule -- especially the latter.
3 - Give a cost for the any additional features requested and a timeline for
delivery and payment. Do this in writing after agreement is made.
4 - Don't be shy about charging! You are a professional and deserve to be
paid for your knowledge. You can only charge for the product, so make sure
you amortize some of those unbilled hours spent being able to get to the
point of being able to do it so quickly for them.
That said, there is nothing worse that sitting on hands doing nothing while
supposedly working. Oh, yes there is. It is sitting on your hands doing
nothing and NOT getting paid. :-)
Shelly
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