709-218-7927 The Landfall Garden House 60 Canon Bayley Road Bonavista, Newfoundland CANADA A0C 1B0 |
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Going Over Budget
Friday, April 15, 2011
I just had another great business meeting with young David Sappleton of Xcite Creative and then came home to read in the Toronto star “ Baeumler: The best job in the world ”.
David and I discussed projects; we work in different fields, but suffer the same penalties of clients accepting the product and then saying “Could you color it blue add another wheel to the left-hand side?”, which eats into our already-slender profit margin.
And we discussed ways to over come this problem; tightening the specifications doesn’t always do the trick.
I have tried proposing a fixed-price for the job, then hourly rate any time AFTER two weeks following delivery; if nothing else that tells the client to test the product quickly, not to wait 3 months before coming back to me.
The Star article includes this memorable line “… put away at least 15 to 20 per cent for contingencies …”.
That Made Me Think
I could issue a proposal for a fixed-price job, and then add (to the quoted value) 15% and mark that “contingencies”.
The message to the client is clear: I can do the job for $5,000, but we both know (don’t we?) that the unexpected crops up. Let us BOTH allow for that.
My message is clear: If nothing extra crops up (or if the client decides to say nothing crops up), then you pay the $5,000. But be aware that you ought to be prepared to pay up to $5,750 if part-way through the job your situation changes.
That Way There are No Unpleasant Surprises
709-218-7927 CPRGreaves@gmail.com Bonavista, Thursday, May 23, 2024 10:49 AM Copyright © 1990-2024 Chris Greaves. All Rights Reserved. |
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