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I Charged $18k for a Static HTML Page

idiallo.com

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Re: I Charged $18k for a Static HTML Page

#71

Post by gk1 »

Great illustration of why hourly billing makes no sense, for either side.

In this case, as usual, the amount of hours "spent" on the project has little to do with actual value provided.

From the contractor's side, he's excited about getting 12x the original quote, instead of realizing he's been severely undercharging for his work and could've been earning 10x or more all this time. I wonder if the author will start charging appropriately for the value he's providing, or if he'll consider this a fluke and continue with $75/hour.

Phrased another way... How many times did you complete a project within the estimated time and get paid $1,500, when actually the company would have been glad to pay $18,000?

Last week there was a thread about consulting tips. I couldn't believe how many people were arguing for hourly billing. One person was even proud of billing by the minute! I hope those people see this story and realize what they're leaving on the table.

I have similar stories to this, where work got delayed due to issues on client's end. One time, I spent a month doing nothing while the client was dealing with something, which later turned out to be a big acquisition. If I billed by "hours worked" then I'd get nothing, but because I had a monthly retainer I still got paid.

Edit: I'm not advocating "fixed price." I'm advocating monthly retainers.

Re: I Charged $18k for a Static HTML Page

#73

Post by peteradio »

sharkweek wrote: post #54
duxup wrote: post #18

I know someone working as a contractor for a big company. 1 year contract. 6 months have gone by and they've done ... nothing. Their boss keeps saying "Don't worry we'll get to you, we're just swamped right now, you're good." They're already talking about extending the contract.

Big companies (rather, people at big companies) WANT to spend money on this kind of stuff for all sorts of reasons. -A team might have use-it-or-lose-it budget, so they have to spend it on something, and a contractor might be the lucky recipient! -Tax purposes! -Spending a lot on a contractor gives them someone to "fire" when they need to explain why something wasn't getting done or something went poorly! The list go…

Unless you are getting taxed >100% I never understood why you'd want to throw away money for "tax reasons". Can someone please help me understand this, it always comes up and I feel dumb for not understanding.

Re: I Charged $18k for a Static HTML Page

#75

Post by mettamage »

IkmoIkmo wrote: post #36

I've got similar experiences working for corporate clients, but it was legal work, not tech stuff. It was a bit more complex than the equivalent of a static HTML, but something that anyone with an IQ of > 90 could learn in less than half a year. There were days when I'd charge clients $15k... for a day's work. This wouldn't have been possible if I worked on-site. But I was essentially completing $15k of contracted wo…

I'd like to ask a couple of questions about this. My email is in my profile if you'd like to answer them.

Re: I Charged $18k for a Static HTML Page

#76

Post by setr »

jamesb93 wrote: post #6

So much waste - I'm not saying he didn't earn his money but how is it possible for a company to run cash positive when it wastes like that?

It’s really easy: you just make bigger margins

Software particularly has stupidly big margins (and stupidly big overhead) when you’re talking companies the size of oracle and microsoft

Re: I Charged $18k for a Static HTML Page

#78

Post by S_A_P »

I don't find this to be beyond belief, but there are a few things the author should have done differently.

1) Notify when hours were exceeded 2) Get written notification that he was still required to come in to the office while waiting for assets or otherwise at a blocker 3) Ask questions to further cement the requirements 4) pick up a phone?

I think that ethically this was not a great move on this persons part, but we live and learn, and hopefully they did learn from the experience.

Large companies have budgets that usually are "use it or lose it", so the ROI doesnt really matter most of the time. Secondly, large companies are less likely have "gate keeper" folks ensuring that there are not wasting hours when the timescale is less than one month. As costs escalate and budgets get blown, that is when they thin out the contractors.

Re: I Charged $18k for a Static HTML Page

#80

Post by shyn3 »

_bxg1 wrote: post #61
sharkweek wrote: post #54

Earlier quoted context omitted.

Big companies (rather, people at big companies) WANT to spend money on this kind of stuff for all sorts of reasons. -A team might have use-it-or-lose-it budget, so they have to spend it on something, and a contractor might be the lucky recipient! -Tax purposes! -Spending a lot on a contractor gives them someone to "fire" when they need to explain why something wasn't getting done or something went poorly! The list go…

One would think the use-it-or-lose-it problem would've been solved by now. It's so obviously dysfunctional. Is there really no better way to determine budget?

Some organization have this issue where you get a budget for your group, and if you don't use it then upper management will think you don't need more resources next year and will budget less or even cut from your department. If you don't use it, they reallocate it to a department that needs it and you never get it back.

Another part is where if you get a hiring budget they expect you to use it because if you aren't spending it on personnel then it means you aren't hiring the best available people at that time.

Non-profits usually spend out their budget.

Regulated utilities can charge a % + the cost of hiring you if it is a capitalized cost, i.e. hiring a contractor to implement a project.If a contractor works 100% on a capital project it's profits especially in a low inflation economy or when the profits are not going to be as good due to forecasting issues it can pump the books.

There are probably other reasons I can't think of.

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