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  1. #1
    Senior Member RDesignista's Avatar
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    Hi,

    I'm making different contracts for all the different types of jobs I'm doing (small jobs, regular jobs, support/hourly contracts). One contract I'd like to add is something that I've heard about in the web design industry: a contract whose price is flexible.

    Example:

    A client asks a contractor to setup a shopping cart which the contractor has never worked with or heard of. The contractor throws out a rough estimate of 10 hours @ $70/hour. Thus the contract is estimated to be $700. However, the contractor isn't sure how long it'll take, so he can only give a quote/estimate. Also, the contractee isn't sure how long it'll take or what he should pay. What if the job takes less time than suggested? Or it takes more time?

    Any tips or clauses would be helpful. As I get more requests for odd jobs/non-standard work, I think having this flexibility would be helpful, to protect myself and my time in case their situation turns out to be a godawful mess.

    By the way, any specific legal clauses should be for American law.

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  3. #2
    Senior Member Webzarus's Avatar
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    That's a tough one that has many answers.

    As with anything in business, you need to be upfront with your client. A "quote" is a "quote"... An "estimate" is an "estimate", and should be treated completely different.

    A quote is a fixed price. An estimate is a price that can change. In either direction, and I explain that to clients going in. Typically, I won't even give a price period. I explain the situation ( I've never worked with the package or framework or whatever the case may be"... The first time I setup a joomla install I told them that, they insisted on using joomla ( because they heard it was good ), I said ok... Well, this will be a learning experience for both of us. My estimate was 6 hours for the basic setup and config... I actually did it in 4, so I billed for 4.

    If a client insist on a "quote", on something you're not sure of, you have to either give them a quote ... And either eat the overage or discount if you complete it quicker , OR , walk away.

    But walk away is a tough thing for people these days. Normally, what I've found is a client that demands a "fixed" price in this situation is one that I'm probably not going to want to be a long term client anyway. So my "fixed" price I give them is so outrageously high, they walk away.

    I've only had one that I quoted 5 times the going rate actually take it, once the ground rule were set, they actually worked out nicely and I eventually discounted it... I was expecting to finish the job, get paid and just tell them, it wasn't working out. Expected to have to do it based on conversations, negotiations, etc. I've actually done quite a bit of work for them over the past 5 years, but the quoting process is always a sticking point for them...

    I've heard of others doing estimates at "reduced" rates, I'm not so keen on going that avenue, as once a client pays you for a certain rate, they expect to pay you that from now one.

    I like everyone else in the world have raised my rates several times over the years, and it almost always a tough sell, but it is a necessary evil of business... So no, I don't discount my rate... Ever. Sure, I've dropped hours, but not the same thing.

  4. #3
    Senior Member kralcx's Avatar
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    Anything which I don't have a flat fee for I charge hourly.

  5. #4
    Senior Member Webzarus's Avatar
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    Quote Originally Posted by kralcx, post: 249277
    Anything which I don't have a flat fee for I charge hourly.
    Brilliant... But In terms of the OP's question. Not so much

  6. #5
    Senior Member kralcx's Avatar
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    Quote Originally Posted by Webzarus, post: 249281
    Brilliant... But In terms of the OP's question. Not so much
    Actually I did answer the question perfectly. K I S S don't over think it.

  7. #6
    Senior Member RDesignista's Avatar
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    I appreciate your answer, as always, Webzarus.

    I like money. At the same time, I don't want to get caught in a time liability at a fixed rate. At the same time, clients would be hesitant if they don't know how much it might cost or how long it may take. There needs to be a middle point. I say this, because the reason I write this is because I just ended up in a stressful troubleshooting job. Theme was bugged as hell, poorly written CSS. And then I hooked up a reservation module... which had some bugs as well!!!! No fault of my client, so I'm not angry at her, but I just ate the ugly end of "Murphy's Law" (anything that can go wrong will go wrong.

    I still don't want to make my prices outrageous for these troubleshooting situations (I did just make two seventy dollars for a light day's work, afterall, though it was stressful), but I do have to protect myself, in case I end up in a crap storm of bugs again. Anyone here know about hedging? It's a way for people to reduce risk. It's usually a term in commodity contracts, foreign currency transactions, and stock. The buyer pays a fixed price or rate that's higher than the normal price or rate, but the price remains fixed, so that removes the possibility of them bleeding money. The seller will accept and accept the risk and are paid extra for it. Basically, they pay a premium to remove risk. And on the suggestion of Webzarus, I could say that if the problem takes shorter than x hours, there will be a refund or discount. Complicated as heck! Imagine explaining this all to a client for contract worth several hundred! But it's smart and fair. I'll probably put more thought into this later. Need to clam my mind after working with so many bugs today.

  8. #7
    Senior Member Webzarus's Avatar
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    Well, I guess I am in a little different situation.

    I have a contract with everyone I work with, they all sign the contract, and they all know my rates before I ever start a project. I rarely take on someone that has not come recommended to me ( I don't knock on doors ), but depending on project load, I have considered projects from new potential clients.

    Basically, I can charge my prices because I have an established clientele, that recommends me to other people, and after I choose to work with them, they eventually send me new clients. On the rare occasion, someone has approached me ou of the blue, I hear their project proposal, I send them my contract, if they want to move on, we schedule a meeting to discuss options.

    Like I said, I never cut my rates, and I always tell them upfront what the options are, if they choose for me to work on something new ( new framework or module or app ), then they know my rates and I give them an "estimate" ... But its a non-binding estimate ( again, discussed and agreed upon ).

    THEY are the final say as to my direction ( sure, I can kinda push them in one direction or another, even push them in the direction I want to take it ), then a project SOW ( statement of work ) is provided for their approval before the project proceeds.

    I recently has a client that I've only done web work for, mention QR codes, I popped open my laptop ( which I rarely do I a meeting ), generated a couple of QR codes and sent them to him via email.

    He said WOW, it's that easy ... I told him yes, and I'd give him a copy of the free software I was using. He then asked what I knew about "barcodes" in general... So we discussed that ... I'm now working up a proposal for an inventory system for his warehouse and trucks... Techs will scan the barcodes on all items used, and generate invoices in the field. Have I ever done that ? No, but its just a matter of breaking it down into pieces of what I do know, figuring out the blanks, then putting it all back together.

    Fun stuff...


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