Re: Establishing Rates - Protect Yourself

Subject: Re: Establishing Rates - Protect Yourself
From: Mike Stockman <stockman -at- JAGUNET -dot- COM>
Date: Wed, 5 May 1999 08:47:10 -0400

On 5/5/1999 8:18 AM, Tom Johnson (johnsont -at- STARCUTTER -dot- COM) wrote:

>For instance, imagine charged $1000 for a project. My bid was intentionally
>low because I wanted to get the experience and get my name known. Halfway
>through I got in a bind and couldn't finish my job. I let the client know
>and they hired someone else to finish the job.

The problem in this scenario is not in the liability... the problem is in
1) Setting a project price instead of an hourly rate, which is a good way
to get screwed, and 2) Setting an intentionally low bid to "get the
experience," which is unfair to yourself and the client.

I realize that setting a project price is sometimes unavoidable, but I
have turned down jobs just to skip the headache that comes with it. The
first time I charged a project price, I felt pressured into keeping it
low (not by the client, but by the blood-sucking weasel at the agency I
was working through) against my better judgment. When the project went
over my estimate (surprise!) I had to eat the difference. If you do take
a project price, make sure it clearly describes the conditions where the
price goes up, and make sure you document each and every problem or
change you run into so you can justify asking for more money later.

Clients who have asked me for an *estimate* up front and fair warning if
the estimate changed along the way have never been sorry, and have never
felt overcharged at the end.

As for setting a low bid on purpose, you're just cheating yourself there
(see my example above). I've had several experiences where clients have
declined my services in favor of somebody who was bidding low just to get
the work. In each case, the client called me later to help finish the job
(at my regular rate, thank you very much) because Mr. or Ms. Lowball
couldn't do the work.

If you can handle the job, charge a standard rate for it. If you can't
handle the job, tell the client honestly what you *can* handle, and
charge a standard rate for that. Your reputation won't suffer that way,
and neither will the client.

----->Mike

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