Re: Billing by project

Subject: Re: Billing by project
From: Richard Yanowitz <ryanowit -at- NYCT -dot- NET>
Date: Tue, 20 May 1997 13:28:24 -0400

At 12:49 PM 5/20/97 -0400, JIMCHEVAL -at- AOL -dot- COM wrote:
>In a message dated 97-05-20 12:13:53 EDT, techwr -at- arundel -dot- com (Peter Kent)
><< It would be interesting to see how many bill by the project and whether
>that increases their income (I believe that overall it probably does). >>
>I avoid this like the plague.
>Even though you can build in revision rates that kick in after a first draft
>and a first revision, my experience is that there are so many unknowns going
>into a lot of projects that it's hard to come up with a realistic estimate
>that also can also be justified by specifics (as opposed say to building in
>25% overage for "unknowns".)

The nub of the problem, of course, is scoping. On the occasions when I've
done a fixed-price deal I have indeed made out extremely well (because I
work fast, and clients still don't pay more than they had expected to). I
have a check list of items to cover, such as number of screens to be
documented, average number of pages per screen, required turnaround time,
number of review cycles/drafts, and so on.

I specify that a change of scope requires re-negotiation. How do you judge
that? Technically, e.g., if more screens turn up than originally estimated
(though I always let the client know that I'm not going to quibble about a
"small" number, which I mentally define as up to 10%). If review times
don't get met, my deadlines get adjusted. And so on.

I have found clients pretty understanding about scope changes--this depends
in part on developing a good and trusting rapport with them as you go.
(The relationship is always key; so is your ability to take constructively
when problems arise such as a need for change of scope.)

Yes, I include an amount of extra money for unnegotiable contingencies. I
have no magic formula for this.

I've never yet had a problem, but yes, with the wrong client there could be
trouble that could cost money. I make out so well this way, and my clients
are happy to know up front what their costs will be, that I'm willing to
take the risk.

The main problems:
- Many projects just can't be readily scoped.
- A fair number of clients are uneasy about scoping, perhaps concerned
they'll pay less on an hourly contract, perhaps worried about changes of
- Agencies, which control most of the work, will almost never go for scoping.

Richard Yanowitz, NYC
ryanowitz -at- bigfoot -dot- com

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