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One thing I could use help with: How do you respond when someone asks you for a monetary estimate? I was approached by someone who wanted to hire me as a freel

One thing I could use help with: How do you respond when someone asks you for a monetary estimate? I was approached by someone who wanted to hire me as a freelancer, but the requirements were quite vague. He wanted a general idea of how much I billed daily, but I really didn't know how to answer it. $300? $600? What's high enough to hook them, but not too high to push them away? How do you factor in risk? What if they don't like what I deliver? This seems related to time estimation, but different enough to ask.

ReverseCold 9y ago
That's a good question for them to ask, usually you'll go for a lower rate. If possible, try to get them to make an offer, or try to dodge the question (gracefully, do not attempt if not skilled at that). Another thing that sometimes works is giving a really high number, but then offering a "deal". YMMV.
- sillysaurus3 9y ago
  I did manage to dodge the question, but now I'm not sure what the next step is. Do you have any advice? Last time I tried this, my rate was high enough that they balked. I'd like to avoid that, but still charge enough to make it worthwhile. I thought it'd go like this: Start at double my highest rate, then wait for them to counteroffer. Commence negotiation. But last time they just walked.
  - sokoloff 9y ago
    Assuming you're not hurting for work, you want them to wince a little when they hear your rate. Regular on site visits and full-time, local work? $1000/day minimum in the high cost of living area I'm in (Boston area). If they straight out walk at that, you dodged a bullet. Bidding too high and losing the work is way, way better than bidding too low and getting it!
  - rorykoehler 9y ago
    Ask them what their budget is. If they don't know or refuse to say, offer to help them calculate the market opportunity or efficiency savings (depending on nature of project) in terms of revenue. Use this to get a budget out of them and then let them know what they can expect for that budget.
roel_v 9y ago
Look at what the market will bear. Adjust based on how full/empty your pipeline is. For this, you need to be involved in 'the scene' - networking drinks, professional development events, that sort of drudgery. Depending on your industry, you can find out what others bid on projects and somewhat derive their rates by asking for results from other rfp's. Another tactic is to meet the client and feel out what his budget is. Base your offer on that. I know people say to never take fixed price projects, but if you manage expectations well, it's perfectly feasible in my experience, and it'll get you (well paid) work that others won't even bid on. Clients can't make full specs. If they could, they'd get some guys from upwork for $5/hr to code it up for them. And they don't want to write blank cheques, either. So the arbitrage there is where the opportunity is as a consultant (not as a freelancer - don't market yourself like that, it denotes 'replaceable cog'). I don't know in what market you are, but 600e (=usd 715) is on the low end for skilled dev work in western europe excluding non-london uk, in my experience (so not slicing psd's or doing piecewise javascript website elements, I'm talking full custom systems). Don't compete on price unless you're desperate for the money. Life's too short to be nickle and dimed.

ReverseCold 9y ago

That's a good question for them to ask, usually you'll go for a lower rate. If possible, try to get them to make an offer, or try to dodge the question (gracefully, do not attempt if not skilled at that). Another thing that sometimes works is giving a really high number, but then offering a "deal". YMMV.

sillysaurus3 9y ago
I did manage to dodge the question, but now I'm not sure what the next step is. Do you have any advice? Last time I tried this, my rate was high enough that they balked. I'd like to avoid that, but still charge enough to make it worthwhile. I thought it'd go like this: Start at double my highest rate, then wait for them to counteroffer. Commence negotiation. But last time they just walked.
- sokoloff 9y ago
  Assuming you're not hurting for work, you want them to wince a little when they hear your rate. Regular on site visits and full-time, local work? $1000/day minimum in the high cost of living area I'm in (Boston area). If they straight out walk at that, you dodged a bullet. Bidding too high and losing the work is way, way better than bidding too low and getting it!
- rorykoehler 9y ago
  Ask them what their budget is. If they don't know or refuse to say, offer to help them calculate the market opportunity or efficiency savings (depending on nature of project) in terms of revenue. Use this to get a budget out of them and then let them know what they can expect for that budget.

roel_v 9y ago

Look at what the market will bear. Adjust based on how full/empty your pipeline is. For this, you need to be involved in 'the scene' - networking drinks, professional development events, that sort of drudgery. Depending on your industry, you can find out what others bid on projects and somewhat derive their rates by asking for results from other rfp's. Another tactic is to meet the client and feel out what his budget is. Base your offer on that. I know people say to never take fixed price projects, but if you manage expectations well, it's perfectly feasible in my experience, and it'll get you (well paid) work that others won't even bid on. Clients can't make full specs. If they could, they'd get some guys from upwork for $5/hr to code it up for them. And they don't want to write blank cheques, either. So the arbitrage there is where the opportunity is as a consultant (not as a freelancer - don't market yourself like that, it denotes 'replaceable cog'). I don't know in what market you are, but 600e (=usd 715) is on the low end for skilled dev work in western europe excluding non-london uk, in my experience (so not slicing psd's or doing piecewise javascript website elements, I'm talking full custom systems). Don't compete on price unless you're desperate for the money. Life's too short to be nickle and dimed.