I price for a job in the following way:
1) Break down job into the high level tasks that will need to be completed.
2) Assign each task an estimated work time (in half hours)
3) Read back through all the tasks and see if there is anything *obvious* that has been left out.
4) Total up the estimated hours (round up to closest full hour).
5) Add 10 to 20% contingency time (sometimes more if the job is something i have not tried before).
6) Determine an hourly rate. I use a little under my current contract rate for small jobs, or my actual rate for medium / large jobs. (Rate atm is £35p/h but I started out on £18p/h about 3 years ago).
7) Multiple Time by Rate to get a "feeler" price.
Then apply the Psychology price adjustment factor...
I consider how much I want to do the job. If I dont really want the work then I add around 35 to 50% to the price from step 7. If I want the job then I consider the price in 7 and either leave it as it is or reduce it until I am happy that the client will accept.
9) The ?am I quoting a fair price? phase:
Once I have arrived at price, I step back and try to visualise the finished product. Once I have a picture in my head, I ask myself how much *I* would expect to pay for that product. Then if I feel I would pay more; I increase again, otherwise if I think the price is fair and I want the work I go with what I have after step 7.
10) Finally; the ?will I get out of bed for that? adjustment:
My last step in pricing is deciding whether or not I can really be bothered to do the required work for the money I will get. If I don?t believe that the job is worth the reward (and effort), I will decline the job.
I also employ one other tactic; Set yourself a bottom line price. If you get into negotiations with the client DO NOT allow yourself to drop below that price regardless of the concessions they make. Obviously if they start stripping away requirements then you have to go back to step 1 and repeat the above process.
The worse thing (imo) that you can do is attempt to negotiate a price once the requirements have changed.
The last thing I will add is that if you are working for yourself and have minimal overheads, you should decide what it is you?re trying to achieve.
- If you want a good, relaxed, quality of life then don?t take on jobs that you know will stress you out; unless the money is great
- The opposite is obvious; work your nuts off and one day you might have enough money to enjoy life again ?