kenneth2k1 Posted February 15, 2002 Share Posted February 15, 2002 Greetings: I work for a financial solutions company. One of the brokers in my district office's region consulted my small networking side business. He needed a certain photo database solution that I am almost done creating (fairly simple). A few points to mention: I have not discussed price with this person yet, because he has been out of town. Also, my experience with these agents is that they are very "thrify" (cheap, in other words. Even though some of them can make $10,000 a month). So my crux is that I need to figure out what I should set the price range at. I have read the posts in this forum, and have receive some very useful pointers. I understand that I should not compromise my integrity by letting him bargain with me. I understand that I should get paid what I feel I am worth. I read a great quote by DanJacoby: "I've learned that professionals should charge what they feel they're worth, and if the client isn't willing to pay it, then either you don't need that client, or you have an overinflated sense of your worth." I love that! My question is how much business do you have to gain to gauge your worth? These agents are used to buying software such as ACT! and GoldMine, modified by a third party to fit their business better(insurance and financial solutions). These programs typically cost between $350 and $700 (although some cost $1000), with an annual fee of around $50. I would like for him to buy my solution, but dont want to over/under charge. Im sure someone in this forum has dealt with salesmen before. Any pointers would be great. I also believe that I would be able to market this solution to other brokers in the future. I am just starting out, and I don't really intend to sell this as my core business (I have another job thats a lot easier while I get through school). Sorry this post is so long, but I am just looking for certain things to look for. I always get good advice here. Thanks Ken Link to comment Share on other sites More sharing options...
danjacoby Posted February 15, 2002 Share Posted February 15, 2002 Are you creating something the client couldn't get in ACT? If so, you can definitely charge more than any ACT database would cost. If he balks, explain it to him. It's even easier to charge a full amount if you don't care about building a client list. Of course, since you've already started the job without discussing pricing (and that was a mistake!), you may have a problem getting what you deserve. My advice -- try anyway. Link to comment Share on other sites More sharing options...
Fitch Posted February 15, 2002 Share Posted February 15, 2002 If this is a custom solution, then you're now at the client's mercy since there was no up-front agreement. You can say, "I charge [$50-$100] per hour, and this took X hours," or perhaps, "I typically charge $X for comparable projects," and then pull a number out of a hat, but you'll just have to hope for the best. If you think, as you say, that you can sell it to others, perhaps you can have this client help you and himself by offering him a cut of each sale that he refers. Link to comment Share on other sites More sharing options...
kenneth2k1 Posted February 15, 2002 Author Share Posted February 15, 2002 Thanks for the input, guys. Yeah, Ive only spent maybe a total of 6 hours on it, and I guess I chalk that up as investment hours. Now I have another question for you guys. When working with one client (the initial client) do you usually charge by the amount of hours worked? Additionally, if you are able to re-sell the solution, do you charge a flat rate to clients in the future? I was thinking of keeping a selling point that it can be modified to fit each organization, maybe charging a flat rate and an additional modification fee (which will be by the hour). What do you think? Link to comment Share on other sites More sharing options...
Fitch Posted February 16, 2002 Share Posted February 16, 2002 "...do you usually charge by the amount of hours worked?" I base my estimate on an hourly rate, for sure! "... charging a flat rate and an additional modification fee (which will be by the hour)." That seems reasonable. You have to find out first how extensive the modifications are going to be! Link to comment Share on other sites More sharing options...
StevenB Posted February 19, 2002 Share Posted February 19, 2002 "...I was thinking of keeping a selling point that it can be modified to fit each organization, maybe charging a flat rate and an additional modification fee (which will be by the hour)." You may want to watch yourself when offering to make modifications. I worked for a software developer that offered modifications - after his client base built up he was getting lost on the changes that were made for each client. It also made upgrades difficult to implement. Just someting I've seen. Good Luck. Steven B Link to comment Share on other sites More sharing options...
kenneth2k1 Posted February 19, 2002 Author Share Posted February 19, 2002 Thanks for all the helpful replies. Now I ask you: at what point is a solution too expensive for a small busines owner with a folio of over $120,000 a year? I guess that would depend on how crucial it is to the business. He came to me with the desire to have a solution like this. I did find something out, though. He uses an old database program called Q&A by Symantec. Is anyone familiar with this program? I guess he worked with this lady from Symantec to customize this program. Anyway, he bought this at one time, so how much do you think he payed for that? Steve, I will take what you said to heart. I may be somewhat pessimistic, but I don't think my client list will get so large that I will not be able to keep track of them. Ken Link to comment Share on other sites More sharing options...
Vaughan Posted February 19, 2002 Share Posted February 19, 2002 How about working out how much your solution will *save* the money per year, and ask for that amount? Link to comment Share on other sites More sharing options...
danjacoby Posted February 19, 2002 Share Posted February 19, 2002 quote: Originally posted by kenneth2k1: Now I ask you: at what point is a solution too expensive for a small busines owner with a folio of over $120,000 a year? This is an example of the wrong question to ask -- you should be asking "At what point is a potential client too small or cheap for me to bother with?" (ignoring, for the moment, that the question ended with a preposition). The difference is that this question will lead to profit, while the other will lead to overwork and unpaid bills (like your rent). Link to comment Share on other sites More sharing options...
kenneth2k1 Posted February 19, 2002 Author Share Posted February 19, 2002 Good points, Dan and Vaughan. Thanks for your help. I will try not to worry about it so much, and just see what happens. It will be good experience. Ken Link to comment Share on other sites More sharing options...
Vaughan Posted February 19, 2002 Share Posted February 19, 2002 More important question: have you left your day job yet? <grin> Link to comment Share on other sites More sharing options...
kenneth2k1 Posted February 20, 2002 Author Share Posted February 20, 2002 Thanks for the replies. No, Vaughan, I did not quit my day job. Thank god, because with my level of experience in FM, I would be on tha street if it was my sole biz! Ken Link to comment Share on other sites More sharing options...
BruceJ Posted March 5, 2002 Share Posted March 5, 2002 The other point to consider is how much support you alone will be able to provide. If you charge full market value for the database, then they will expect that you provide support at their beck and call - es[ecially if they've never had something done custom by contract before. Since these guys are tight-wads and he didn't discuss cost before he left, he may be thinking he can slide you a $20 spot and you're even. After all, "aren't you buddies, you just throw this stuff together in your basement office don't you?" Anyhow, that's the attitude I sometimes find from people who ask if you can do someting for them without even mentioning a price. The next point is, how much value did YOU get out of this deal? How much did you learn from doing this work? It may be that he provided a project for you to better tune your FM skills and an hourly rate would be a scam as you may have spent a lot of that time reading books and how-to figuring. That last point is where I am with a lot of projects. However, FM work is only a second bussiness and my kids will still eat even if I cut a guy a great deal on work I did for them. Others may not have that luxury. If you do good work, he may ask you back for something bigger latter. I just "gave away" a program for $2K a few months ago only to have them return and contract with me to do another job for $20K! My investment paid off this time. Link to comment Share on other sites More sharing options...
kenneth2k1 Posted March 6, 2002 Author Share Posted March 6, 2002 Hey Bruce. I appreciate your help and insight. This forum is great because of its wealth of knowledge. First, you "gave away" a solution for $2 Gs! Nice. I couldn't even fathom selling this solution for that much. Its a simple flat file for insurance agents to hold digital images and associate policy/claim info. One of those "typing monkeys" in the science labs could spit this out in a few days. Thats the beauty of FM. It has a couple of printable layouts and search scripts. Fairly basic (we'll call it Image File here). Fortunately, I sent a pay schedule, price list and sample development contract to him yesterday. I basically listed that consulting, delvelopment and testing would be billed by the hour. I will work for 45 bucks an hour. Plus, he will have to buy the base solution that I created (as I have it to this date) for $150 per license. I figure I can use this to build off of for future clients. Tell me if this is good: I also listed that he has the option to buy the rights to the base solutions (Image File) for about $1800. This means that he has the right to re-sell the product and I cannot make it for someone else without his consent. Bad idea? I'm sure you all have sold some of the most intricate of solutions - created for big corporations and used on hundreds of workstations. Mine is not as complicated. But see this is the kind of advice I need! Also, I read in this forum once (sorry I cant reference it now) that the client should pay you even when you are learning. If you need to consult a refernce manual or research on behalf of the project it is still billable. Keep in touch. I cannot express my gratitude to you all. Ken Link to comment Share on other sites More sharing options...
Fitch Posted March 8, 2002 Share Posted March 8, 2002 quote: I also listed that he has the option to buy the rights to the base solutions (Image File) for about $1800. This means that he has the right to re-sell the product and I cannot make it for someone else without his consent. Bad idea? Not good! Better would be to license it for him to resell, and you reserve the right to sell it on your own. Or agree not to sell it for one year. Or something! How bad do you need that $1800? Link to comment Share on other sites More sharing options...
agraham999 Posted March 10, 2002 Share Posted March 10, 2002 Sorry if this is long...just trying to help... I charge clients a base of $65 an hour for consulting, but $110 an hour once I touch the keyboard...but...if we are talking about a big project...I take the whole thing into consideration and then charge a "project fee" for the entire job. I spend a lot of time up front gauging the clients needs and develop excellent documentation up front...this way I can set in stone (so to speak) what is included in the first rev and what is not. I'll tell you...clients will nickel and dime you for modifications...so be sure to document before you build...and meet with the client often to ensure you are on the right track. Nothing like having to rebuild something because you both had a different vision. A few other things I do to prevent extra work without getting paid...is I run import tests on some of their data from their Exchange server or their Excel files (whatever) before building the actual db...otherwise they may make more work for you based on how poorly they kept their records...so you may have to write scripts to fix their data on import...and you want to get paid for that work. I recently had to write 100 scripts to repair the poor records kept by a company. That work took a couple of extra days of total work...but I charged them $2000 for it. I give 30 days support on agreed upon design issues that we discussed in the beginning. I don't charge to repair bugs the first 30 days...and I build a bug report button on each layout so they can email me with bugs. I do charge for instructional support. I also build in Instant Messenger support so they can get help instantly with one button click. I also charge for installation...and the reason is that when you setup on their server in their offices...you have to do things like Page Setups on their printers...and you'll run into other issues...so be prepared to take a few days of tweaking...so get paid for it. I suggest you reccommend they purchase Timbuktu so that you can make fast fixes and modifications on their server...or be able to see their screen if they have trouble. I have clients who are hours away...but with TB2 I can make updates quickly from the comfort of my sofa. Oh yeah...one more point...I don't "sell" them a database...I license them the solution. They own the data...but I own the design. I don't allow them to re-sell my solutions...without my permission. It is an open-ended license...so they can use it forever...they just cannot sell it. Keep in mind that Goldmine and others are really limited to what they can do...Filemaker is a really special program in that it allows them to have an app that is tailored to them and them only. Goldmine, ACT, and others can't touch FMP for it's flexibility. So comparing a $300 app to a Filemaker $2,000-$50,000 solution is not really possible. Filemaker to me is all about "Can" vs. "Cannot." I can tell you right now that Goldmine cannot run a 30 step script which makes 20 calculations and formats it in any way you want...with one button...in 1.5 seconds...it just doesn't have the grace. So be sure to explain to clients...honeslty...that these applications just can't do things they'll want...and you are at the software developers mercy for revs...whereas you can deliver new features and solutions anytime. I've been designing software/web/FMP for 10 years...and making a living is possible...just know your limitations...and be careful not to paint yourself into a corner where the project ends up costing you money. Clients who can afford to pay for good development will...and they won't bat an eye at a solid price...if the client is trying to work you down and you know you are selling your soul...back-off and don't do it. The fact is that solid clients expect solid prices...if it seems to good to be true...they'll wonder what is wrong with your work that it is so cheap. Just my $.50. Link to comment Share on other sites More sharing options...
kenneth2k1 Posted March 10, 2002 Author Share Posted March 10, 2002 Agraham, thanks for the detailed reply. Yeah, I tried to use GoldMine once and noticed its limitations. Each SQL query script I built in it was not working, and I found out that scripts are limited to some 250 characters! That was not acceptable to me. I agree: FM is far more capable. I am not too worried about importing procedures because the client will only be exporting FM records into FM databases. So far I have noticed no problems. By the way: when importing FM - FM dbs, is there a way to automate the field matching? Know what I mean? This way the user can point FM to the path they want to import and dont have to match up the fields. Is that possible? Keep in touch - I respect everyone's 50 cents worth! Ken Link to comment Share on other sites More sharing options...
agraham999 Posted March 10, 2002 Share Posted March 10, 2002 About importing FM to FM...sure...you do an import using Matching field names...then you can write a script that imports from a specific file...and just like with printing you can have FM restore the Import order. Is that what you mean? Link to comment Share on other sites More sharing options...
kenneth2k1 Posted March 11, 2002 Author Share Posted March 11, 2002 Yep. Thanks a lot. Ken Link to comment Share on other sites More sharing options...
Recommended Posts
This topic is 8088 days old. Please don't post here. Open a new topic instead.
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now