The Head of Fred

Freelancer Feature: 4 Tips to Build Value Into Your Quotes

Posted on 15. May, 2009 by Fred in Freelancing, General Business, Web Development

A key part of what we as freelancers do to ensure our success happens during the quoting process. This is the all important step in which the specifications of a given project are determined, time estimations are given, and then the all-important hand-off of the quote over to the prospective client. Do you ever find that you undercut the amount of time a project takes? Even if you tried your hardest to put hours to the project, you end up running over and watching your hourly rate erode?

Okay, let’s say the client is a perfect client in the sense that they never challenge the limit of what the quote ecompasses in terms of project scope. How often have any of you had a client who doesn’t challenge those boundaries in passive-aggressive ways if not directly? I’m going to guess the answer is “rarely”. Feel free to correct me on that assumption.

So, we all are trying to build strong working relationships with these clients, but whether they know it or not, they always have a bigger picture in mind no matter how clearly defined the project’s tasks are. At some point, its just not worth it to spell it out due to time constraints anyway, right?

So, if that is the challenge, how do we try to mitigate the risk of overruns while keeping a client happy? Here are a few improved uses of your quoting time to ensure you get a fair price and minimize the risk of going over on the quote.

Tip 1: Ask more questions, ask relevant questions, and ask follow-up questions

The golden rule should be “assume nothing and ask everything” when in the discovery process. Don’t just find out what the tool is for, ask how they execute in real life. This will give you a much better understanding of the operational side that you are most likely being paid to automate to a certain extent. If you can’t visualize yourself doing a given task then ask more questions until you feel like you could go in and do the task or process yourself with minimal guidance. Sure, you may be committing more time at this stage than usual, but you are reducing the potential for massive time drainers later that come when you have to change something already built.

Tip 2: Put the cost in context – justify your price with a cost analysis

The more information about the current cost of doing whatever it is you are going to assist them with, the better off you are. If you present them with a $5000 quote out of context, the first question they will have is “why so much?” But if you find out that the only alternative is a 3rd-party system that charges a setup fee and a monthly fee, you can show them savings over time instead of the initial investment. What is even better is that when you come back with a slightly lower quote, you can mention the savings you are giving them when compared to the other option they are considering. If they are not aware of an alternative, be bold – find that alternative, figure out a 3-year cost for them, and then you can show them how they will save money by working with you instead.

Tip 3: Present the draft quote to the potential client and eliminate the uncertainties as much as possible

When I started freelancing, in my eagerness to get started on a project I would hand off a quote as a final quote and then say something like “we can tackle the unknowns as they come”, which is amazingly reckless and of course, I was sinking my own ship. I had no defense when the client would remember an 11th-hour feature that needed to be there, and to keep them happy, I would just throw it in. After a while I realized I needed to slow down, and approach the situation from in a much more careful, thorough manner. That isn’t to say I don’t still have quotes where I underestimate, but it happens a lot less than it used to.

Tip 4: If you can, build in a financial safety net

If you think you can squeak in a percentage of the total quote as a financial safety net, you should. Although I would recommend a 10% buffer, anything helps. You also reduce headaches for your client by not needing to get additional funds approved for the little stuff.

Of course, there are many other ways to refine your quoting process, but my personal experience has shown that emphasizing these four things has helped smooth out the process, keep the client satisfied, and keep the value of the project from becoming an issue. If you have other tips or techniques, I’d love to hear about them. Thanks for reading!