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New project proposal.
How much should I ask?
mirceagoia




msg:790298
 5:44 am on Dec 29, 2005 (gmt 0)

Hi,

I have started to write a project proposal for a website for a company (practically, write down all the phases: introductory, description of hosting solutions,domain name suggestions,the structure of the site,the mockup design of the site/layout,the marketing plan,different solutions to make the site profitable,all what I think necessary for a website to thrive...so far I have 35 pages including illustrations).

Now, being new in America and living here (just arrived here 3 months ago from an eastern europe country) I have a problem :):

- how much should I ask for this kind of proposal? (only the writing and then improving it after consulting with the client)

If the client approves the project proposal (after discussing it) I will also implement it (I will do all the programming necessary - they have a graphic artist who will do the design of it).

- how much should I ask for implementing it?

My problem is that I am still yet accustom to eastern europe prices :)...so I have a problem of setting up a price here (yes, I know, now I am on the other side of the baricade :) ).

I don't want to ask too little...nor too much. Most of my work was done so far for foreign companies (german and american) but at eastern european prices (while I was living in eastern europe).

Can somebody give me an advice?

Thank you.

 

johntabita




msg:790299
 5:29 pm on Dec 30, 2005 (gmt 0)

First or all, what you're writing sounds like a project plan, not a proposal. If you're charging the client for this work, then you should have agreed upon the cost up front. I'd suggest you stop and get that done first.

There's really no answer to your question. We've charged as little as $300 and as much as $1000 for this.

mirceagoia




msg:790300
 8:28 pm on Dec 30, 2005 (gmt 0)

I don't charge them for this project plan (in fact, it's a project plan, not just a proposal - still have to learn english better :) )...

I will charge them only if they will approve the plan...yes, it's a but tricky...they could not approve the plan but after a while they may use this plan and not pay me a dime :)...it's a risk, I know.

But I wanted to know how much should I to ask to implement this project plan, to make it reality (not how much should I charge for writing the project plan - althought you gave me an idea on how much should I charge in the case they will approve it ;) )...

BTW, I am in the West Virginia area and this project is for a company here...so I don't know how the salaries are here (althought I have an idea by looking at www.salary.com)

Thanks.

Feydakin




msg:790301
 3:42 pm on Dec 31, 2005 (gmt 0)

No one can tell you how much to charge for a project without knowing exactly what the project is.. But I can help you determine what to charge in a vague way..

First you need to decide how much money you need to make in 1 year.. To make this easy let's say you need to make $2000 a year to be happy.. There are approximately 2000 billable hours in a year (you could bill more or less, but 200 is a good number)..

This mean that you need to charge $1 per hour to live and be happy..

Now all you need to do is figure out how many hours the project will take.. Say it takes 100 hours.. So, you charge $100 (I like to add 10% to all estimates for a cushion) and charge them $110..

Simple math..

Good luck and welcome to America!

johntabita




msg:790302
 5:40 pm on Jan 4, 2006 (gmt 0)

First you need to decide how much money you need to make in 1 year.. To make this easy let's say you need to make $2000 a year to be happy.. There are approximately 2000 billable hours in a year (you could bill more or less, but 200 is a good number)..

This mean that you need to charge $1 per hour to live and be happy..

Now all you need to do is figure out how many hours the project will take.. Say it takes 100 hours.. So, you charge $100 (I like to add 10% to all estimates for a cushion) and charge them $110..

Simple math..

The only problem with this method is that "how much money you need to make in a year" has absolutely no bearing on the worth or value of your services to your clients. I couldn't care less how much my gardner or accountant needs to make. I only care about one thing: does the money I pay him outweigh the negative consequences of doing this myself, or not doing it at all?

By using this method, you may wind up grossly overcharging or undercharging for your services.

Junanagoh




msg:790303
 10:28 pm on Jan 4, 2006 (gmt 0)

I agree. I did this math saying that I would work the 'average' billable hours a year, at the average salary of 60,000 a year (salary.com statistics) in my area for my area of expertise and at the math I should bill $30 an hour. Now, I know that 1 I am not going to get that many hours a year when I go freelance (which after making a hobby site a last month I fell in love with the web and decided no more working for a corporation, work for myself) and I also know that I can charge double that in the area I live in.

I am not an expert at these things but I would say that the simple math given above can work well for you BUT soon you will notice that where you live it will be along difference.

Just my 2 cents. But my pennys might not count :)

mirceagoia




msg:790304
 3:21 am on Jan 5, 2006 (gmt 0)

So, I suppose if I am asking $35/hour woudn't be too much...

reuben101




msg:790305
 3:28 am on Jan 5, 2006 (gmt 0)

Another idea is to ask them what their budget is for this project so you can build as many desired components into it without exceeding their monetary constraints. That will help you determine their range and give you a number to work around. Once you know a range, you can break the project into several proposals at different price points.

mirceagoia




msg:790306
 5:54 am on Jan 5, 2006 (gmt 0)

I will meet with them this weekend and see what they'll say...maybe I'll find out about their budget.

johntabita




msg:790307
 6:01 am on Jan 5, 2006 (gmt 0)

So, I suppose if I am asking $35/hour woudn't be too much...

As I said above, the whole problem with time-based billing is that it has no bearing on the value of your service to the client. The key to setting your fees lies not in asking how much you want to make, but how much your client wants to make.

Consider what your client is really buying. Is it truly your time? To use the gardner analogy again, I don't care if mine takes 2 hours or 10 to cut my lawn, so long as I get what I want -- a well-groomed lawn that I didn't have to mow myself. Similarly, your client wants an outcome, not your time. Get to the bottom of what your client wants to increase or decrease, then help him put a dollar value on that increase/decrease.

There's a saying, "Until you establish value, any price is too high." If you do what I've described, you've now put a tangible value on the project, and any price that's less than that amount will give your client a return on his investment.

Oftentimes, what the client wants is intangible, not a monetary return. But it can still be measured in increases or decreases. It's a bit tougher to nail down a hard number, but that intangible thing still has a monetary value in the eyes of your client. As I said in my previous post: Does cost of doing nothing outweigh the price he'd be paying you? That's the essence of value.

inbound




msg:790308
 6:20 am on Jan 5, 2006 (gmt 0)

Charging USD35 is probably too little.

Not charging for the project plan is probably a bad mistake. I suggest charging a modest amount for the plan, and deducting it from your fee if they take on the whole project. You may want to take some of the risk as part of the sales process but I'd still charge the plan writing at USD250 or more per day.

In the UK it's normal for agencies to charge out at anywhere between GBP50 to GBP100 per hour for a mid-high level SEO. USD35 per hour is way below that level.

I would be tempted to charge at least USD500 per day for a number of reasons.

1. You will spend half of your time chasing business rather than doing billable work.

2. You are worth that to a company if you are good at what you do.

3. Companies that are worth doing business with will pay that sort of money.

4. You are not in Eastern Europe anymore so don't feel that you should charge so little. What about rent, bills, food, health insurance, business insurance/costs, transport, expenses, professional fees etc. USD60K does not go very far if you have to pay everything from one income.

Good Luck

Junanagoh




msg:790309
 6:37 pm on Jan 5, 2006 (gmt 0)

While we are on this topic, how much do you all charge for an average project and what does it include and how long does it take? While at that, is the cost of living high or low where you live?

On a side note, I would like to say that right now I am charging people rock bottom prices for sites that I know. I am planning to get out and go freelance by the end of the year (news years res.) and want to get my name out as well as learn more (I taught myself from internet tutorials and made my first site purely by hand in notepad and now I am starting to learn dreamweaver).

marketingmagic




msg:790310
 7:12 pm on Jan 5, 2006 (gmt 0)

I wouldn't provide a 35 page document with such detail without seeing some commitment from the customer.

I'd suggest a prelim proposal with a brief outline of what you propose, then when you have some money on the table you can provide the full blown version. Keep it short initially; 2, maybe 3 pages tops. include terms and conditions and other important information, but don't get into detail on domain names, directory structure, etc.. You don't want to give them the plan that they can just implement on their own with out you.

Good luck!

mirceagoia




msg:790311
 8:21 pm on Jan 5, 2006 (gmt 0)

Well...I already handed out the project proposal to their representative with whom I'll meet again this weekend.

It's a 54 page proposal now :)...yes, I know...could be a mistake (he is a brother of a friend of mine and is responsible in that company with this project).

The cost of living here in West Virginia isn't that high as in Washington DC (where I lived for a month), or like in California...

This is would be my first project here in US...so I have yet to decide how much shoould I charge (this is response to Junanagoh).

Junanagoh




msg:790312
 8:30 pm on Jan 5, 2006 (gmt 0)

I live in an expencive part of California :( so I am sure our prices would be extremely different.

mirceagoia




msg:790313
 8:55 pm on Jan 5, 2006 (gmt 0)

California...my dream :)!

There I wanna go...after a while...I like sunny abnd warm weather (althought I was born and raised in a mountain region with lots of cold and bad weather).

Junanagoh




msg:790314
 10:53 pm on Jan 5, 2006 (gmt 0)

Lol I live a few a blocks from the ocean. Its foggy all the time. California is not as it is dipicted. :)

(especially when you cant get a a 3 bed house for less then a million and I have seen houses go for $45m about 10 miles away from me....)

mirceagoia




msg:790315
 4:53 am on Jan 6, 2006 (gmt 0)

Well, come here and see how it is ;)...then probably California will look like almost heaven :P...

But yeah, you're right...many things are expensive there than here...

So, I am gonna move there when I'll be rich ;)...

Junanagoh




msg:790316
 4:36 pm on Jan 6, 2006 (gmt 0)

I wish you luck on your dreams :)

syber




msg:790317
 4:50 pm on Jan 6, 2006 (gmt 0)

A good rule of thumb is to determine how much someone on staff locally would make for doing the same work, and then double it. So if the going local salary for that type of work is $50,000 per year, you would charge at least $50 per hour (50,000 divided by 2,000 hours is $25.00). Remember, as an independent, you have to cover your own vacations, health plan, training, etc.

mirceagoia




msg:790318
 7:38 pm on Jan 6, 2006 (gmt 0)

I talked today with their representative and he said the proposal was very satisfatctory.And he wants to meet me on Sunday.

They have a full-time web designer...but I don't know how much he makes...need to fin out somehow (it's a sensitive thing here to find out how much somebody makes...in my country would be easy, they usually don't keep this secret :) ).

Will let you know how this will go on ;)...

mirceagoia




msg:790319
 11:39 pm on Jan 8, 2006 (gmt 0)

I talked to their representative today.

Hmmm...they offered me a job based on the project proposal (they were very please with it and if I don't take the job they will pay for writing it - about 2000$).

They offered me these (one year contract):
- about 25,000/year (about $13/hour)
- an apartment with 3 bedrooms (I don't need so many bedrooms though because I don't have family here) and I won't pay any rent or utilities
- a laptop
- health insurance (I don't know yet about 401k and other benefits)
- weekends free, paid vacation, sick leave
- the apartment is right across the street where the office is
- they offered an flexible work program (I can work from home most of the time or I can wok at the office - or both)
- they offered me involvment in other group businesses (modelling, video production - I have some experience with these two)
- posibility to grow as the business grows (this business for which I wrote the proposal is a startup but it will be a part of a group of companies,some of them already established)
- they want to use me not only for this project but on other stuffs

After one year I can do whatever I want, stay with them or go in another place.

What do you say? Is this something you would take?

reuben101




msg:790320
 12:28 am on Jan 9, 2006 (gmt 0)

In that area, that probably will equal about $45-50k a year which is likely $10-20k more than median. Don't know why you are in WV, but if you want to stay in that area and want the security of a regular check and benefits, I'd suggest taking the job, doing it well and spend your evenings developing skills and side projects that will get you to your dream job/location. Best of luck!

mirceagoia




msg:790321
 1:00 am on Jan 9, 2006 (gmt 0)

Well, I am here in WV because I have here some friends who introduced me to US environment (as well as hosting me).And the representative of this company is the brother of one of my friends here.

Of course, I don't want to stay here long term!

Does a low salary (like would be here) would influence my following earnings (if I choose after an year to go to another company and they'll ask about my salary history)?

My goal in the future is not only to stay in a dream location but also to be my own boss (like many webmasters from this forum are).

So, it seems that salary.com isn't too accurate when it says that an average salary here is about $62,000/year (for what I am doing)...

Junanagoh




msg:790322
 7:56 pm on Jan 9, 2006 (gmt 0)

remember average is just that. Average. People are going to make 30k a year doing what you do and some are going to make over 100k a year doing what you do in your area. For the area you live in I would take that. Shoot, I would take that here to start off and get more experience! You can always work on other stuff and make more money while you are making a nice salary and build up a name for yourself. But its up to you and what really matters is will you be happy with it, do you want to be your own boss, and would you just be happy with 2k for that plan you wrote up for them.

Good luck with whatever you do!

mirceagoia




msg:790323
 8:58 pm on Jan 9, 2006 (gmt 0)

Experience isn't something that I lack...I am in this field since 6 years ago. So, practically, I won't learn anything new at this job.

My wonder is that if I am starting with so low salary (even for this region) this can influence somehow the future salaries from other employers (this until I become my boss here - I was my boss while I lived in Eastern Europe).

Junanagoh




msg:790324
 10:42 pm on Jan 9, 2006 (gmt 0)

Do you think that you can be your own boss in the next year? What I am saying is that this would be a very nice salary (since it includes housing) and you can still do freelance on you time off. Also, I dont think that is a bad salray for your area. Benifits/home/25k a year can add up to a lot. If its your first job in America I dont think it will influence future work that much at all. You have to start somewhere.

But dont forget I am new to this so I am giving a total outside opinion.

mirceagoia




msg:790325
 3:11 am on Jan 10, 2006 (gmt 0)

Those benefits are offered by most companies...also the computer.

And the rent here (at least in that town, Point Marion - 12 miles north from Morgantown,WV) I don't think is so expensive (it's an apartment not a house).

I mean I am staying now in Wheeling and I pay 225$/month rent, 45$ cable internet, food (I don't eat to often at the restaurant), some utilities (I have a roomate so I split the rent only and some utilities).

What is good is flexible program (work from home or office), the fact that I start someting from ground up and involvment in other activities (I am not so sure about that).

I don't wanna wait until the business grows to get some other benefits (recte money) because I won't stay here that long (no more than 1 year max).

I've seen some job offers here that paid 35-45,000 year (on craigslist). I've consulted with other friends of mine and all said the salary it's quite low even for this region.

I don't know if I can be my own boss this year :)...but I have work (I kept my freelance work which I had back home...so I have some source of income - yes, it's not great but...).

I'll be tinking at this anyway...

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