Pricing

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There are a number of different methodologies which can be used when determining your pricing: Hourly, Fixed Fee, Cost+. You can set up to price input or to price output or to price value.

If you are pricing input you are showing each piece and part (marked-up 20-30%) involved in the process and totaling them up to come up with a final price. If you are pricing output you are showing what the final products are and giving each of them a price (typically rounded up). If you are pricing value you are determine based on the size of the organization, their reach, and industry what the value of what you are providing is worth (this has NO connection to the actual cost of creation or the amount of time spent on the project).

How to defeat the clients that want to rip apart your pricing piece by piece, removing what they deem "unnecessary." 1. Remove details so they CANT cut out sections --- they have no numbers to cut. 2. Clearly define the SCOPE. You should be focusing your attention on C-L-E-A-R-L-Y defining what is included in the project. Explain that how many people working for you, or for how long is inconsequential to the pricing. You have agreed to produce X for a set price & to deliver it on a set day. What is required on your end to make the project happen, doesn't matter as long as you make it happen.

Some prospective clients are so concerned about only paying for the time it actually takes to do a project ask them: if your costs exceed what you have specified (without a scope change), will they be willing to pay more? Generally, the answer is NO - so, then it doesn't matter how long it takes you, or how you do a project... you assume the risk in making it a profitable endeavor for yourself. But they don't get the right to try and cut the rate that you have determined is necessary to successfully complete the project on time.

When you are calculating what it costs to complete a project... imagine that you are walking into a completely empty room and need to rent all of the pieces of equipment/furniture/software necessary for the completion of the project. You need to add these cost into each project because your equipment has a lifespan and you will need to replace it all at some point. If you are not calculating the planned obsolescence or failure of your equipment into client pricing then you are taking it out of your profit. It has to be paid one way or the other.