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I've had few contracts where I've made very nice money like $20K for what in average was 3 days. They were all urgent jobs from some very big companies whose ma

by FpUser 9mo ago

I've had few contracts where I've made very nice money like $20K for what in average was 3 days. They were all urgent jobs from some very big companies whose managers knew about me (In their particular environment I was famous for doing "impossible" tasks in very short time). When they asked me to do the job I knew that they're big and can pay handsomely so instead of giving them my hourly rate I would just simply tell that I would take up to let's say 5 days and would charge them this total sum disregarding of how long it would take in reality. They were totally fine with it.

mixermachine 9mo ago
When you have enough experience and the project fits, this is the way to go. They don't pay for your time. They pay for your output and you can bill them on the output.
tonyedgecombe 9mo ago
I've had one job like this where they were desperate for a solution and after months of searching couldn't find anybody to do the work. I just happened to have the intersection of several skills they needed and be available. It also helped that they were losing a lot of money every day they didn't have a solution. On the other hand I've grown to be wary of customers who push for a fixed price. They are usually doing that because they know something that you don't.
- Maxion 9mo ago
  I've found that it's generally SMEs that tend to be stingy when they ask for a fixed price. Large corps ask for a fixed price just so that they can internally talk about money and budget the thing once and be done. SMEs in my experience generally are able to handle change in scope and billing easier than larger ones.
- chasd00 9mo ago
  > On the other hand I've grown to be wary of customers who push for a fixed price. fixed price projects are like handling dynamite. A sophisticated client can use a fixed price contract to extract a huge amount of work/value from an ingorant consultant and a sophisticated consultant can use it to extract a huge amount of cash from an ignorant client. My advice to both sides of the fence is clearly, _very_ clearly, define the scope, schedule, and a rock solid change order process for changes.
  - rawgabbit 9mo ago
    I second this. I see inexperienced business folks (including CEOs) think they are going to take advantage of an IT vendor by signing a fixed price contract and then demand constant additions to scope couched as something else. What ends up being delivered is a hot steaming pile that is dead on arrival. Act like shit; be treated like shit.
- blobbers 9mo ago
  This is very interesting! Are you able to talk about what the specific problem they were trying to solve was?
j45 9mo ago
Weekly rates > Day rates > Hourly rates
- zipy124 9mo ago
  Depending on your confidence in yourself and your ability to execute sometimes also: Total Project Cost > Weekly rates > Day rates > Hourly rates. Charging someone £10k for a solution can be better if you know you can do it quickly and changes the math for the buisness. They are more likely to pay a higher amount for a solution rather than an hourly rate.
  - j45 9mo ago
    Yup outcome based pricing is best. I save my clients 20-30% across the board on their digital transformation projects, the solution price or rate doesn’t matter compared to the 6-7-8 figures I lace in their pocket. Solution pricing can be further extended into contingency based pricing. Have the clients gather pricing for you and then hammer home a better deal and have a cheque cut for the portion of the savings.
- achairapart 9mo ago
  Input < Product Value < Output. This is the equation. When you quote on the input - that's the time you need to do the job, you multiply your rate for the weeks/days/hours, plus maybe some other expenses. This is the so-called "Hours and materials". When you quote on the output, you take in consideration the overall value/gains you client will make by your work. This is called "value-based" pricing. This equation is unbreakable, if your input is grater than the client output (ROI), something is very wrong, or completely illegal. Some says value-based pricing is the holy grail for pricing anything, but if you're smart enough, you already understood that, based on circumstances, sometimes it makes more sense to quote on the input, other times on the output. Just do the math. This may be a classic example of "value-based" pricing. It doesn't matter how long you take to make a static HTML page (input), the client overall project budget is probably over $100K (as stated by op), it's totally ok for them to invest ~20% of it to make sure it delivers on time and by specs.
MarsIronPI 9mo ago
I'm interested in working as an independent contractor when I finish college. Do you have any advice for how to become known as "that guy you call in when you need the impossble done tomorrow"?

by FpUser 9mo ago

mixermachine 9mo ago

When you have enough experience and the project fits, this is the way to go. They don't pay for your time. They pay for your output and you can bill them on the output.

tonyedgecombe 9mo ago

I've had one job like this where they were desperate for a solution and after months of searching couldn't find anybody to do the work. I just happened to have the intersection of several skills they needed and be available. It also helped that they were losing a lot of money every day they didn't have a solution. On the other hand I've grown to be wary of customers who push for a fixed price. They are usually doing that because they know something that you don't.

Maxion 9mo ago
I've found that it's generally SMEs that tend to be stingy when they ask for a fixed price. Large corps ask for a fixed price just so that they can internally talk about money and budget the thing once and be done. SMEs in my experience generally are able to handle change in scope and billing easier than larger ones.
chasd00 9mo ago
> On the other hand I've grown to be wary of customers who push for a fixed price. fixed price projects are like handling dynamite. A sophisticated client can use a fixed price contract to extract a huge amount of work/value from an ingorant consultant and a sophisticated consultant can use it to extract a huge amount of cash from an ignorant client. My advice to both sides of the fence is clearly, _very_ clearly, define the scope, schedule, and a rock solid change order process for changes.
- rawgabbit 9mo ago
  I second this. I see inexperienced business folks (including CEOs) think they are going to take advantage of an IT vendor by signing a fixed price contract and then demand constant additions to scope couched as something else. What ends up being delivered is a hot steaming pile that is dead on arrival. Act like shit; be treated like shit.
blobbers 9mo ago
This is very interesting! Are you able to talk about what the specific problem they were trying to solve was?

j45 9mo ago

Weekly rates > Day rates > Hourly rates

zipy124 9mo ago
Depending on your confidence in yourself and your ability to execute sometimes also: Total Project Cost > Weekly rates > Day rates > Hourly rates. Charging someone £10k for a solution can be better if you know you can do it quickly and changes the math for the buisness. They are more likely to pay a higher amount for a solution rather than an hourly rate.
- j45 9mo ago
  Yup outcome based pricing is best. I save my clients 20-30% across the board on their digital transformation projects, the solution price or rate doesn’t matter compared to the 6-7-8 figures I lace in their pocket. Solution pricing can be further extended into contingency based pricing. Have the clients gather pricing for you and then hammer home a better deal and have a cheque cut for the portion of the savings.
achairapart 9mo ago
Input < Product Value < Output. This is the equation. When you quote on the input - that's the time you need to do the job, you multiply your rate for the weeks/days/hours, plus maybe some other expenses. This is the so-called "Hours and materials". When you quote on the output, you take in consideration the overall value/gains you client will make by your work. This is called "value-based" pricing. This equation is unbreakable, if your input is grater than the client output (ROI), something is very wrong, or completely illegal. Some says value-based pricing is the holy grail for pricing anything, but if you're smart enough, you already understood that, based on circumstances, sometimes it makes more sense to quote on the input, other times on the output. Just do the math. This may be a classic example of "value-based" pricing. It doesn't matter how long you take to make a static HTML page (input), the client overall project budget is probably over $100K (as stated by op), it's totally ok for them to invest ~20% of it to make sure it delivers on time and by specs.

MarsIronPI 9mo ago

I'm interested in working as an independent contractor when I finish college. Do you have any advice for how to become known as "that guy you call in when you need the impossble done tomorrow"?