4 ms·
estimation is a skill... it's an extremely difficult skill to master. I know I'm horrible about it. So yeah, you are right, this pitches the (difficult) jo
by lsc 17y ago
estimation is a skill... it's an extremely difficult skill to master. I know I'm horrible about it. So yeah, you are right, this pitches the (difficult) job of pricing back on to the client.
However, I don't think that's always a bad idea. The thing is, as a contractor, I'm looking at the opportunity cost of the time and effort I put in to the project, right? but, as the client, you are looking at the value you get out of it. The two are almost wholly unrelated.
Now, if you've looked at how I set my prices, I generally use the 'what it costs me plus a reasonable profit' method (for me, 'reasonable profit' has to do with how long it takes to pay for my hardware, as that's basically what I'm selling.) And really, for commodity goods that have significant marginal costs in terms of investment capital required, I think that is the best and most fair way to do it. (using non-transparent and inconsistent pricing structures is a good way to get your commodity customers really, really pissed off.)
Now, I think contracting is fundamentally different from selling a commodity good. When I'm selling a commodity good, I don't really mind that my margin on each unit is a little (or even a lot) less than my competitors. I can make it up by simply selling more.
This is not true with contracting. my body has a expiration date; I mean, it's not set in stone, but my life will consist of a finite number of days, and each day I can only productively work for a small number of hours. So I really want to squeeze every bit of value out of it. So yeah; someone is going to have to do some work pricing it, either the client or the contractor. It sounds like this is one strategy for letting the contractor potentially share in some of the massive upside possible from technology work.