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Want to up your consulting rate? Try overwhelming force.

30sleeps.com

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Re: Want to up your consulting rate? Try overwhelming force.

#21
post #19
post #9

Earlier quoted context omitted.

If you can't accept fixed bid contracts you won't be doing much work in quite a few places. Fixed bid contracts are the way vast segments of the industry work. Not being able to do fixed bid work basically says "I'm bad at estimating and don't know how to control scope creep". Of course you can do fixed bid contracts. But you'll have to make an ironclad arrangement about what is to be done within the scope of the con…

Out of curiosity, how do you define a solid scope ahead of time? What kind of details do you go into? What if the client asks you to tweak a feature that's within the scope, but ends up taking up significant amount time?

A solid scope in a mid sized or large project is usually determined by a design specification that all parties sign off on. Just preparing such a specification is a project in its own right and that's why for smaller jobs it usually isn't done that way but much more loosely defined.

For me the most important bits are:

- does all this fall within my current competence (in other words, do I have to learn something new or not)

- is the project comparable to something I've done before or is it virgin territory

- how clear is the customer able to communicate their vision of the things they want from me

- do they already have artwork / wireframes or is it that I'm supposed to be the 'main contractor' contracting out those aspects that I can not do myself

- are all the interfaces the system has to the outside world clearly defined and documented and/or accessible through existing apis?

- is there a realistic expectation as to the amount of work that we are talking about and the amount of time alloted for documenting, coding, testing & debugging

- are there hard deadlines associated with the project or not

- what do they expect in terms of after-sales when the project has been delivered (do their people take over?, do they help with building?)

- can we agree on a rough block diagram of how the system will be put together and do I feel confident about each of those blocks in terms of complexity and an estimate as to how much time it will take to realize that block

For me the 'deal breakers' if the customer wants fixed price are mostly their vision, communications issues and the knowledge about external hook-ups. If any one of those gives me a bad vibe then I'll probably either refuse the job or I'll tell the customer that it is not possible to execute this job fixed price unless they come up with solutions for those issues.

> What if the client asks you to tweak a feature that's within the scope, but ends up taking up significant amount time?

That is a very tricky situation. I think that both parties are somewhat to blame if such a situation arises, if it is 'within scope' then a tweak should not end up costing significant amounts of time that indicates a less than general attitude towards coding things, on the other hand there should be some penalty for changing the design after it has been nailed down and agreed on, even if it is within the scope since it will require re-work of at least some portion of the design.

I'd probably negotiate a reasonable adjustment of the price in that case (also to dissuade from further tweaks, or to get paid for them), and a note to the effect that the deadlines will be pushed back as a direct consequence of this.

I'd also want that documented in email with the consequences clearly stipulated.

Re: Want to up your consulting rate? Try overwhelming force.

#22
post #18
post #8

I've run a software consultancy for the past few years and wish to reiterate one of his key points: never accept a fixed-bid contract. Such contracts are incompatible with the creative and unpredictable forces of software development.

Get better at estimating, and please don't ever use the words "creative and unpredictable forces of software development" in front of a client. You may be able to avoid project rates in your market, but in mine, clients (a) want to pay for an outcome, and (b) want to know what they're going to end up paying. There is a middle ground here; bill in person/weeks instead of by the hour (which, by the way, is probably an…

Technically speaking, charging any amount of money is a professional signal.

Re: Want to up your consulting rate? Try overwhelming force.

#23
post #18
post #8

I've run a software consultancy for the past few years and wish to reiterate one of his key points: never accept a fixed-bid contract. Such contracts are incompatible with the creative and unpredictable forces of software development.

Get better at estimating, and please don't ever use the words "creative and unpredictable forces of software development" in front of a client. You may be able to avoid project rates in your market, but in mine, clients (a) want to pay for an outcome, and (b) want to know what they're going to end up paying. There is a middle ground here; bill in person/weeks instead of by the hour (which, by the way, is probably an…

There is a middle ground here; bill in person/weeks instead of by the hour (which, by the way, is probably an amateur signal), and structure your projects in terms of milestones that have economic value to your client.

This "consulting hack" I picked up from Thomas a few months back helped land a lucrative and mutually rewarding engagement, by the way. Relatedly, it helped me give the client a menu of options: here's what you get for one week (A), for two weeks (A + B), for three weeks (A + B + C).

It gave the client easy options to adjust scope to adjust the final bill (rather than negotiating on my rate), which suits me fine, and given that I've got built-in milestones where I'll be able to demonstrate significant value to the client, possibilities for extending the contract/relationship abound. ("Things are going pretty well -- want another week out of me? I've knocked A and B out of the park, can I interest you in getting C as well, or do you want to do that some time later after I've raised my rates?")

Re: Want to up your consulting rate? Try overwhelming force.

#24
post #8

I've run a software consultancy for the past few years and wish to reiterate one of his key points: never accept a fixed-bid contract. Such contracts are incompatible with the creative and unpredictable forces of software development.

I am comfortable accepting fixed bid contracts under a couple of different circumstances: (1) I'm competing against really expensive contracting firms, so I'm charging 2x the rate I'd be comfortable with. There's lots of margin for changing my mind. (2) I'm working with someone for the Nth time, and I know that they're good about being flexible.

But in general, fixed bid contracts are difficult. They incentivize the parties to spend time talking about what the agreed-to scope was, rather than spending time fixing things to however we NOW want it to work.

Re: Want to up your consulting rate? Try overwhelming force.

#25
post #19

Earlier quoted context omitted.

Out of curiosity, how do you define a solid scope ahead of time? What kind of details do you go into? What if the client asks you to tweak a feature that's within the scope, but ends up taking up significant amount time?

A solid scope in a mid sized or large project is usually determined by a design specification that all parties sign off on. Just preparing such a specification is a project in its own right and that's why for smaller jobs it usually isn't done that way but much more loosely defined. For me the most important bits are: - does all this fall within my current competence (in other words, do I have to learn something new…

Those sound like some solid advice. I'll bookmark it. Thanks! :)

Approximately how much time do you spend in this planning phase? As for the specification, what kind of things do you include in it?

Re: Want to up your consulting rate? Try overwhelming force.

#26
post #23
post #18

Earlier quoted context omitted.

Get better at estimating, and please don't ever use the words "creative and unpredictable forces of software development" in front of a client. You may be able to avoid project rates in your market, but in mine, clients (a) want to pay for an outcome, and (b) want to know what they're going to end up paying. There is a middle ground here; bill in person/weeks instead of by the hour (which, by the way, is probably an…

There is a middle ground here; bill in person/weeks instead of by the hour (which, by the way, is probably an amateur signal), and structure your projects in terms of milestones that have economic value to your client. This "consulting hack" I picked up from Thomas a few months back helped land a lucrative and mutually rewarding engagement, by the way. Relatedly, it helped me give the client a menu of options: here's…

I am sorry for my ignorance but can you tell who is Thomas? (probably a user here on hacker news)

Re: Want to up your consulting rate? Try overwhelming force.

#27
post #23

Earlier quoted context omitted.

There is a middle ground here; bill in person/weeks instead of by the hour (which, by the way, is probably an amateur signal), and structure your projects in terms of milestones that have economic value to your client. This "consulting hack" I picked up from Thomas a few months back helped land a lucrative and mutually rewarding engagement, by the way. Relatedly, it helped me give the client a menu of options: here's…

I am sorry for my ignorance but can you tell who is Thomas? (probably a user here on hacker news)

http://news.ycombinator.com/user?id=tptacek

Re: Want to up your consulting rate? Try overwhelming force.

#28
I can see doing fixed price contracts if you are doing yet another version of something you've done before. Most of my projects are something that is half research, half implementation. I'd lose my shirt if I did those projects for a fixed price.

There is a video that has great reasons for not using contracts, fixed prices or functional specs. Google "All Roads Lead to Rails" (http://unspace.ca/innovation/speak)

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