Pricing help!

[pippilongstockings]

Hi

We've been asked to provide prices for a large project that is different to the small projects we've worked on before. Does anyone know of any good online tutorials or websites that could help us to work out a new pricing structure?

Thanks in advance.
Pippi

[Barnie]

tbh its a bit vague, you need to give more details as to what the project is

[Glassglen]

email the competition and try and get some prices

[pippilongstockings]

a bit more info......

We're a small writing company specialising in medical communications (scientific papers etc). Since we set up 14 months ago the business has basically been my business partner acting as a freelance writer, with me in the background sorting out the admin. The projects we've been delivering up to now have been short-term, mainly writing manuscripts for scientific journals. We've been asked to provide prices for a much bigger project which will run for about 18 months and will involve delivering manuscripts as well as providing strategic advice, project management and people management for a team of about 10.

Not only will some of these activities be new to our company (but not to us personally), but they will also take up a good deal of our time so that we will ultimately have to stop working for a number of our other clients.

Currently, we charge a flat rate for all work but I think we now need to provide prives for the various aspects of the work. For example, the strategic advice is quite high-level stuff and I think we'd be selling ourselves short by quoting our current rate for this.

Any advice for how we work this out? The client wants us rather than any other company as we have significant experience with the subject matter so we're in a good position but at the same time we want to be reasonable and realistic.

Thanks if you got this far!
pippi

[Moocha]

You need to work out how long the project is going to take factor in some extra time as a margin just in case of difficulties. That should give you a man hour figure and time that by the hourly cost you charge. That will give you a base figure that the price shouldn't be less than. If its a big company you can get a way with charging more and they will expect a reasonable price, if you are too cheap they will not take you seriously. Get quotes from your competitors then adjust your figure you have accordingly. The most important thing is don't take a job on that is not going to pay off or you don't have the man power or skill to complete.

[pippilongstockings]

Thanks moocha, I'll contact a few competitors and see if I can get their prices but I think they might be a bit cagey about telling me..... As for the man power, I'm pretty sure we can manage. We've got a few subcontractors who we can rely on if we get a bit too busy. Good point about not being too cheap, this was my thinking too.

One potentially complicating factor is that we've worked for them a fair bit before so they know our current hourly rate. Do you think they'll be expecting us to charge the same for the basic work? And is it worth just increasing our rate and having a flat rate for everything rather than different rates for different types of work?

Thanks,
pippi

[TotallySport]

IF you can try not to drop other clients for work, it's putting your egg's all in one basket which makes the risk bigger, if you can put extra staff in the qoute to coupe with the work, it's easier to lay off the staff than to get customers back.

[pippilongstockings]

That's true. We'll have to look at finding more sub-contractors for the technical side of things I guess. It's relatively easy to find people to help with the admin/office management side but much more difficult to find reliable people to do the technical work.

[TotallySport]

That's true. We'll have to look at finding more sub-contractors for the technical side of things I guess. It's relatively easy to find people to help with the admin/office management side but much more difficult to find reliable people to do the technical work.Obviously upto you, but why not use sub contractors, and look for staff, when you find the staff you use the subcontractors less, but means you can cover the work anyway, but look at building an inhouse team which should be cheaper, unless of course your sub contracting over seas in which case staff might not be the way forward.

[pippilongstockings]

Problem is that sometimes we have loads of work and so need help but we might go for several weeks with a reasonable amount of work that we don't need help with.

[TotallySport]

But if you have staff doing the "work", that leaves you time to look for more work.

[pippilongstockings]

True. It's definitely something to consider. It sounds odd but we just didn't expect it to grow so quickly! We never really considered that we might need more staff than just the two of us......