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I Charged $18k for a Static HTML Page

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

#231

Post by aequitas »

A valuable lesson I learned at a young age from one of my first 'customers' when doing computer repair jobs for friends and neighbours was is that you don't get paid for what you can or do but for the value you add or time (money) you save someone.

Most of the time the problems I had to solve where easy ones. Install printer, update software, remove toolbars, email settings, etc. All 5 minute work jobs, seldom totalling to more than an hour or 2 an evening. Not even worth asking money for in my opinion, because it was so easy en quick for me to do. But my neighbour always insisted I accept his money. Because for him, having to solve these issues himself would cost him multiple evenings. So the money he was giving me, which felt like too much to me, was stil a bargain for him. Also in his words it was easy for me because I had spend years in training to acquire this knowledge, or as others might call it: wasting your time behind that computer playing video games.

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

#232

Post by jkulubya »

w23j wrote: post #127
umeshunni wrote: post #107

Earlier quoted context omitted.

You have to spend X anyway, because the money is pre-tax or non-taxable, you can spend 1.5X-2X, so the extra money is 'free'.

I'm with peteradio, I also never understand this line of reasoning. Let's say the company has earned 1,000$ and the tax rate is 50%. Your expenses X are 100$. So 1,000$ - 100$ = 900$. Of which 50% (450$) are tax and 50% (450$) are profit. Now double X to 200$: Then 1,000$ - 200$ = 800$. Of which 50% (400$) are tax and 50% (400$) are profit. That means your profit is 50$ lower (400$ instead of 450$) then if you hadn't…

It should be a choice between spending pre tax dollars or spending post tax dollars. I doubt many would argue in favor of “burning” money just for the sake of not paying some fraction tax on it.

Imagine that you must access $100 of labour/whatever somehow.

  $20000 - sales
  ($10000) - cost of sales
  ——————
  $10000 - gross profit
  ($100) - extra labour paid for with pre tax money
  ——————
  $9900 net
  ($4950) tax
  ——————
  $4950 ending sum (pay dividends or do whatever you feel like with this)
vs

  $20000 - sales
  $10000 - cost of sales
  —————
  $10000 - gross profit
  ($5000) - tax
  —————
  $5000 - after tax profit
  ($100) - extra labour, post tax money
  ————
  $4900 - ending sum
It’s a bit unrealistic because (1) labour should always be pre tax (2) there are rules about what goes where in an income statement and you can’t just decide to put stuff where you want but there is some flexibility.

In particular, the one easily controllable lever is how much interest you pay on debt (pre tax spending)

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

#233

Post by nateferrero »

crispyambulance wrote: post #224
zamadatix wrote: post #221

Earlier quoted context omitted.

That big business does something isn't and indicator of whether it's sketchy or not. I wouldn't even say the comparison maps 1:1 anyways.

You're right but whatever it is, that's what "brings in the bacon" for a lot of businesses.

pricing is an entire industry of it's own, with conferences and such

I see it like advertising - one part of the chain of value, and ensuring that a responsible and fair transaction occurs

Production: control of how something exists

Project management: control of when something

Advertising: control of how you become aware of something

Pricing: control of how you take ownership of something

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

#234

Post by mediaman »

LeonM wrote: post #212
derefr wrote: post #200

Earlier quoted context omitted.

How do they prevent paying random people who decide it'd be funny to send them an invoice?

This is actually a really big problem called invoice fraud. Many companies struggle in setting up some workable system to prevent it. The problem usually is that someone at the accounts payable department (sometimes in a different building or country) must pay all the hundreds or thousands of incoming invoices. Having a robust system in place for them to check if the product/service is actually delivered for the pric…

Usually they use purchase orders initiated by the buyer/manager to solve this sort of problem.

Hiring a freelancer? Issue a purchase order to the freelancer for the maximum amount you think you'll pay them. They then bill you for how many hours it actually took, after completing the job. Then accounting can process it if it's under the PO value.

No PO, invoice doesn't get paid.

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

#235

Post by mywittyname »

noir_lord wrote: post #139
gk1 wrote: post #71

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 c…

One of the first web systems I ever put into production (still in use other than modernization I went 5 years without a bug report which still astounds me) after I jumped from desktop to web I charged £1500 for (it was about 20 hours actual work the rest was spent learning the right way to do things), did the job over 6 weeks. Client let slip they'd been quoted £11,000 for it and 3mths. Next job they asked me to do w…

> Or as an ex-boss pithily put it "serious people charge serious money".

Leadership teams are buying validation as much as they are a product. That's why management consultants can charge so much damn money, they usually aren't telling the company anything new, they are there to back managers decisions.

When you look at it that way, you're not just getting paid to build something, you're getting paid to be the subject matter authority who walks in and tells leadership how smart and forward-thinking they are.

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

#236

Post by dv_dt »

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.

Sometimes having resources on standby, ready to start really is the fastest way to get through a project (sometimes it is just waste though)...

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

#237

Post by anonytrary »

This sounds like an awful experience. You were brought in to write a single, trivial HTML page and thought the job would take you about 2 days, give or take (which, it would have). Then, it ended up taking 7 weeks because the company's communication was incredibly poor. The error here is so large, I'd be pretty upset. At least they paid you for your two months of service, though. How are companies this inefficient? They completely wasted about $20k for no reason.

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

#238

Post by selflesssieve »

stronglikedan wrote: post #201
crispyambulance wrote: post #178

My parents had been running their own tailor shop in the 80's, barely making ends meet, pulling in less than $20K a year. It wasn't for lack of business, father was a master tailor trained in Italy and capable of elite bespoke craftsmanship. They had as much business as they could handle. The problem was that they were charging what they thought the work was worth rather than what their customers were willing to pay.…

But also, charge accordingly, if you don't have to post your prices (as your parents probably did). A lawyer is likely willing to pay a lot more for the same website than a tailor shop, and I'll gladly take both of their money.

The term is price discrimination.

Offering coupons through the mail, online ad codes etc. You are reaching out to different demos using different marketing techniques and offering or not offering discounts accordingly.

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

#239

Post by nostalgk »

aequitas wrote: post #231

A valuable lesson I learned at a young age from one of my first 'customers' when doing computer repair jobs for friends and neighbours was is that you don't get paid for what you can or do but for the value you add or time (money) you save someone. Most of the time the problems I had to solve where easy ones. Install printer, update software, remove toolbars, email settings, etc. All 5 minute work jobs, seldom totall…

Not sure I quite understand the mechanics behind it as well, but I've been through a similar training program and it appears to be effective.

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

#240

Post by koala_man »

lixtra wrote: post #223
koala_man wrote: post #74

As a teenager I once got paid a flat rate of $300 for what turned out to be a ten minute job with Excel vlookups. Funny that my hourly rate peaked at 17.

You probably saved the company 1h of work per week for some years. Finding another expert would have taken them half a day of searching. So it made economic sense from their part as well. Did you learn to seek such situations to profit?

They were very happy to pay me, and gave me that same spiel themselves.

Turned out they had budgeted twice that amount for an external professional consultant to look into it, and just figured they'd let me have a whack at it first because why not.

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