by Leanne Rollins, Membership Manager
What are you worth?
Last month I asked Quill readers for some input on the next topic for this article. Apparently we all struggle with project estimating, because the overwhelming majority asked about scoping a project, costing it out, and presenting the result to a prospective client.
Itís a fact that preparing an estimate is stressful. When you freelance, itís not just your writing that builds your reputation—itís also your ability to forecast and then stay within budget. Despite my experience as both a captive employee and as a freelancer, I still second-guess my estimates each time I prepare a proposal. Will the client think I am way out of the ballpark? Am I under-cutting my services? What parameters have I missed that might cause me to blow the budget?
When I quoted on my first freelance project, I completely under-cut my services not on rate but on time required. I hadnít yet figured out my page-per-hour average and basically provided a pie-in-the-sky proposal that met the clientsí required (and unreasonable) date. In painful reality, I worked three 80-hour weeks to pull off the project, but I managed to come in on budget and time. Despite the sleepless week, I learned a few things:
Per hour or per project?
Everyone struggles to decide the best way to estimate a project. Remember that most companies will require a dollar cap on a project, especially if the company must cut a P.O before you can invoice. So even if you estimate per hour, you need to give the client a reasonable estimate of the number of hours needed. I always quote per project, but I put a very obvious caveat in my proposal that states something like ďif the number of hours consumed reaches within 10% of the total budget due to scope increase, the client must agree to allocate an additional number of hours to the project at x rate.Ē Most clients donít even blink at this clause, but one did and gave me a hard time about it. I refused to remove the clause, and the client eventually signed it. Fortunately, we didnít need extra budget but I hate to think about what might have happened if we did.
To have even a hope of estimating a project you MUST probe for any and all existing material that the client can provide up front. I sign an NDA before the client even agrees to hire my services so that I can get a copy of the software (or device in some cases), copies of the specs if they have any, and I talk to the client and developers on my dime. All told, I invest about six hours of my precious time (free of charge) before I can prepare a proposal that I am confident about. In some cases, I include a clause in the proposal that states the client will also agree to pay for my discovery work if they hire my services. That depends on the client though, and on the scope of the project.
Once I have a very good annotated outline of either the help system, book, or training modules, I apply the per page rationale. So, if my outline indicates a 100-page User Guide, and my working rate is three hours per page, thatís a total of 300 hours. Apply the dollar rate (say $60/hour), and weíre looking at a cool $18,000.
To calculate duration, also know the number of hours you are able to work in a week. If you plan to work 40 hours per week, divide 300 hours by 40 hours and youíll get the number of weeks needed to complete the project. Make sure you add a little breathing room for slight changes in scope!
If the client faints at the thought of spending $18,000 on a mere User Guide, remind him/her that hiring a full-time employee to perform this task would cost somewhere in the ballpark of $25,000. (A full-time employee earning $60,000 per annum actually costs the company an additional $100,000 in overhead each year. Divide $160,000 by 52 weeks, then multiply the result by the number of weeks you estimated for the project. You should come in significantly less, and if not, re-think your proposal!)
What else do I put in a proposal?
Each time I complete a project, I learn a little more about what I should have included in the proposal. Hereís a brief synopsis of what I typically include:
Two last bits of advice:
Once again, let me know if there is any topic in particular youíd like to me to cover next month. Email me at email@example.com with your input.
About Leanne Rollins
Leanne recently became a self-employed contractor, escaping management roles for the first time in years. This newfound freedom has allowed Leanne to take on extra-curricular activities such as a more active role in the STC. When not writing or playing with her kids, Leanne enjoys running and soccer.
In this issue:
Contents | President's Message | Head to Head | Council Meeting Minutes | Freelance 101 | In the Numbers | View from the Other Side | Membership Update | General Meeting Announcements | Resume Service