Again, good points! But you really have to keep in mind that there are more size customers out there than 'large companies', plenty of companies that require IT services are in the medium bracket (say 10 to 100 employees).
They're also usually quite price conscious, especially in the current climate. Even the bigger ones are looking at their budgets with a pretty sharp eye.
(depending on the market you're active in), you can wonder though, do you want or not want the customers that are shopping around based on price only ?
There is a big difference between your consulting rate and the cost to a customer to get job X done. I'm not saying a scheduling system for your local dentists office needs to be a six-figure job; I'm saying, pull the right levers to get the number where it needs to be. Specifically:
* You can make 24/7 support a line-item premium service.
* You can make support after a 2-week "acceptance" period a line-item premium service.
* You can have your basic rate include a 6-week window for delivery, at your shop's discretion, and make a more predictable delivery date a line-item premium service.
* You can have formal typeset documentation be a line-item premium service.
* You can have access to improvements and feature requests incur a full consulting dev cycle on your basic rate, and offer a line-item premium service to do point- and major- release updates for N years.
* You can staff projects with timelines that allow you to juggle 3-4 projects for different clients simultaneously (even if you do them serially, you preserve the scheduling flex to deliver them all at once), and offer a line-item premium to get a 100% or 200% improvement in time frame.
* In bare-knuckle negotiation with a client who is just being a good businessperson and determined to get the lowest rate possible, you can strip off features from their requirements, down to the minimum they could conceivably accept and still call the project a business win, and negotiate over features instead of rate.
If you do all of these things, you're rustproofing. But if you're not prepared to do any of them, your only lever is going to be your consulting rate, and the dynamics of the freelancing market are going to tend to drive your rate down over the medium term.
You consistently provide very logical advice in the freelancing arena, no doubt from years of experience. I would like to see your version of this book.
Comments
Again, good points! But you really have to keep in mind that there are more size customers out there than 'large companies', plenty of companies that require IT services are in the medium bracket (say 10 to 100 employees).
They're also usually quite price conscious, especially in the current climate. Even the bigger ones are looking at their budgets with a pretty sharp eye.
(depending on the market you're active in), you can wonder though, do you want or not want the customers that are shopping around based on price only ?
Food for thought.
There is a big difference between your consulting rate and the cost to a customer to get job X done. I'm not saying a scheduling system for your local dentists office needs to be a six-figure job; I'm saying, pull the right levers to get the number where it needs to be. Specifically:
* You can make 24/7 support a line-item premium service.
* You can make support after a 2-week "acceptance" period a line-item premium service.
* You can have your basic rate include a 6-week window for delivery, at your shop's discretion, and make a more predictable delivery date a line-item premium service.
* You can have formal typeset documentation be a line-item premium service.
* You can have access to improvements and feature requests incur a full consulting dev cycle on your basic rate, and offer a line-item premium service to do point- and major- release updates for N years.
* You can staff projects with timelines that allow you to juggle 3-4 projects for different clients simultaneously (even if you do them serially, you preserve the scheduling flex to deliver them all at once), and offer a line-item premium to get a 100% or 200% improvement in time frame.
* In bare-knuckle negotiation with a client who is just being a good businessperson and determined to get the lowest rate possible, you can strip off features from their requirements, down to the minimum they could conceivably accept and still call the project a business win, and negotiate over features instead of rate.
If you do all of these things, you're rustproofing. But if you're not prepared to do any of them, your only lever is going to be your consulting rate, and the dynamics of the freelancing market are going to tend to drive your rate down over the medium term.
You consistently provide very logical advice in the freelancing arena, no doubt from years of experience. I would like to see your version of this book.