I want some inputs/tips on quoting the cost to a Client. If I am developing a web site with medium level of complexity and time to develop is say 2 months and 1 resource is required. What is the difference in pricing when the Client 1)does and 2)does not require ownership of the code.
+1
A:
Hi,
The cost factor is determined by the effort. Here's the simple way to do this.
1.) Estimation of Efforts by decomposition
List out all the functionalities of project in an excel sheet. Put 3 columns for each functionality saying UI DESIGN, CODING, TESTING. Put down the number of hours for each functionality and each column. Do this for all features. Sum up all hours and you should call it estimated man-hours.
2.) Get the industry cost for man-hour cost of your target development platform and multiply it by the estimated man-hours.
Now, this is a very very basic way of calculating effort estimations and cost. You should always prefer incremental approach as in agile. agile is more about managing and getting things done on time and focuses less on estimating costs.
For source code you should charge additional 40% of the original project cost. If the cost was 100 USD, with source code it should be 140 USD.
this. __curious_geek
2009-06-18 09:51:36
This approach will earn me less money but good reputaion to stay in market for a long time. Also it looks standard on most points. I am a bit sad on selling the code off for just 40% of total cost :-(.On the same lines what exactly do we mean by Rights- does it mean we can continue to use/sell the code after selling it off to the Client?
MSIL
2009-06-18 10:17:24
What a bunch of nonsense. This is not a labor market, you are selling knowledge and solutions. Some solutions are better than others. 10 hours of failing is worth much less than 10 hours of building a killer app. You need to stop thinking about time and costs and focus on the value of the outcome. Compare it to products of similar value . Slapping an arbitrary 40% on 'project cost' to determine value is ridiculous.
SpliFF
2009-06-18 10:47:38
40% is becuase of medium level of complexity of a simple website project. And how do you think its so essential to gain much more than that ?
this. __curious_geek
2009-06-18 10:54:14
+1
A:
This is an old problem (probably a dupe too) but...
1.) Guess.
2.) Double it.
Nearly all pricing is based on what the client can afford as much as your costs. Find out what the competition is charging for the same thing. Compare to other products in the market to establish relative worth. If there is a free product out there that does what your software does (but better), then the market value of your software is close to 0. On the other hand if your software solves difficult problems then it is worth more than the sum of it's production costs.
SpliFF
2009-06-18 09:53:12
I've heard it this way: (1) guestimate (2) quadruple it (3) you'll probably find you have underquoted :|
Jeffrey Kemp
2009-06-18 10:01:10
+1
A:
I recommend checking out the Build Internet! blog. They have several articles on helping you produce quotes for clients, as well as a Pricing Bootcamp series running this week: "This series focuses on the basics of philosophy and method behind effective pricing."
An interesting read!
Some people have also found Matt Everson's Project Estimator very useful.
Barry Gallagher
2009-06-18 10:53:22
Thanks a lot for the links - in fact they are really practical pieces of advice. I now know how to groww myself as a seasoned negotiator.
MSIL
2009-06-18 12:52:56