How Project Estimating Can Lead to More Money and Happier Clients

The most highly sought after goals in a freelancer’s work life likely include more money and increased client satisfaction. But oftentimes, these two goals seem at odds — we equate higher client satisfaction to better project quality that doesn’t burden the customer with increased or hidden costs. Unfortunately, this leads to less money for us, and frankly, that sucks.

So how do we make more money and deliver a better project experience and keep our clients happy?

Simple. It all starts with the very first phase of your project — before any serious work actually begins. I’m talking about the preliminary project estimations you do (well, hopefully you do) before starting client work.

I consider this one of the most essential stages of a project, if not the most important. Why? Because it’s at this stage where not only do you discover the client’s needs, but you also have the opportunity to provide an honest assessment of the project, including its costs, resources, time commitments, and whether or not you actually want to take it on. After this stage, you’re pretty much locked into the project, and changing even the most minor aspects could prove dangerous to your relationship with the client.

All projects must first pass your sniff test

What's that smell?

If there’s one thing teenagers are good at, it’s deciding whether or not their previous day’s clothing can pass muster for re-wearing. If it smells bad, toss it. Implementing a similar simple screening process with projects can also prevent embarrassing odors later on — and I’m talking about the stink of soured feelings.

An unbiased sniff test of potential new projects can help you to weed out clients right away where neither money nor satisfaction will ever likely be possible. These are the vacuum projects that suck up your time, effort, and resources, leaving both you and the client drained at the end.

There are many red flags new projects can throw up, but here are just a few basic sniff tests you can perform:

  • Does the project reek of a low budget? If the prospect is using phrasing such as, “we’re a very small business,” or “we need a simple brochure website,” watch out.
  • Is the prospect proposing some questionable work agreement such as profit-sharing, advertising, or the promise of more work? The value of a dollar today is higher than that of a dollar tomorrow (or pound, euro, and so forth — you get my point). Get your dollar upfront or reject these projects.
  • Are you being raked through the mud by a foot-dragging prospect? If you’re spending hours upon hours trying to get a prospect to sign off on a deal, you’re wasting your time.
  • Does the prospect’s background check out? Do they have a real business model? Are they a registered business entity? Do they have references? If you’re going to be spending loads of time with this client, it doesn’t hurt to make sure they check out.

Getting rid of problem clients as soon as possible will help alleviate many project pains — and lost revenues — but this is only the beginning.

Don’t be a receptacle for fantasies

Think about it: Ideas don't have to suck

Nothing sounds better than, “Yes, I can do that.” That’s because “yes” is the easiest answer to give. No one likes hearing “no,” but instead of agreeing with every strange idea a potential client throws at you, take a step back and offer realistic solutions.

This is the first trap freelancers and designers fall into: making promises they can’t keep (or afford to keep). Does the following discussion seem familiar?

Potential Client: And we want the homepage to have a huge Flash animation with tons of special effects, and when a user hovers over it, there should be sounds and … this is something you can do, correct?

Freelancer: Oh, yes — absolutely. You won’t be disappointed!

Potential Client: Great! And remember, we don’t want to spend too much on this.

Freelancer: Absolutely not!

I know for a fact that the above example is not an extreme; I’ve encountered it more than once myself. The freelancer above dug himself into two holes. First, he outright agreed to provide something that might not be in the client’s best interest. Sure, that may be unavoidable, but a good designer doesn’t merely create awesome-looking websites — they educate. The second hole that just about buries the freelancer in the example is his agreement to the prospect’s ambiguously restrained budget. Since the prospect didn’t define a number, they have the upper hand in rejecting anything the freelancer proposes to them, especially since the freelancer agreed to stay within the realm of the prospect’s desire not to “spend too much.”

How could this have gone better? Let’s see.

Potential Client: And we want the homepage to have a huge Flash animation with tons of special effects, and when a user hovers over it, there should be sounds and … this is something you can do, correct?

Freelancer: Mr. Client — yes, I can do that, but it will cost more. I think the idea has promise, but what if we were to do [whatever might be reasonable] instead?

Potential Client: Hmm. You make a good point. I suppose that could be a better direction, especially if it prevents us from spending too much. What other ideas do you have?

A number of good things happened in this example. First, the freelancer never said “no” directly. Instead, they agreed to the client’s idea, but followed their agreement with a definitive higher cost. The freelancer then complimented the idea, but offered an alternative solution based on their experience and by using a disarming what if question. The client understood where the freelancer was coming from and noted the point, asking for more ideas from the freelancer instead of bombarding them with more fantasies.

Build smarter project quotes

If all else fails, you can always use a dartboard

Once you and the prospect have hashed out the finer details of the project, the ball is now in your court to provide a quote. This is where many freelancers and designers knock their pay grade down a notch.

I’ve noticed a popular way to formulate a quote is by simply tallying up the number hours a project will take. Easy? Yes. Great way to lose out on money you deserve? Absolutely.

Project quotes and estimates should be more than a simplistic formula that you come up with on the back of a napkin. Nearly every project and client you encounter is going to be different, requiring varying levels of support, talent, and resources. There’s more to projects than just number of hours. Here are a few pointers that can help you to provide smarter quotes.

  • Develop more than just one hourly rate. Yes, at its core, a project quote is going to be determined by how many hours the work is going to take. However, your hours should not be billed at just one standard rate. Instead, consider increasing your rate for more complex work such as software programming and establishing a baseline rate for less intense tasks.
  • Use past projects as a reference point. Are previous projects taking more time than you estimate? If you don’t measure this, you’ll never be able to refine your quoting process. Simple time tracking tools such as Harvest can help.
  • Build project management time into your quotes. Web projects are more than just design and development work. Project management is the glue that keeps everything together and is one of the most time intensive aspects of the client work — make sure you are compensated for this.
  • Determine what resources you have available to you before meeting with prospects. If you’re purely a front-end designer, how are you going to handle requests for back-end coding? Or copywriting? Build a reliable network of other freelancers and subcontractors who can help take on this work and be sure to know their rates before devising a quote.
  • Review your schedule for your own availability to take on new projects. Are you struggling to fit projects in? Or are you struggling to find projects? Either case should determine how much you charge, because like a precious commodity, market conditions can play a factor in your pricing. (Be careful not to vary too wildly — consistent pricing is still important, especially for agencies. I recommend doing this only under extreme conditions.)
  • Factor in unique circumstances introduced by the prospect. Is there an increased urgency for the project to be finished quickly? Is the client more risky? Or — a potential reason to lower quotes — is the client more likely to bring you more work?
  • Take into account post-project work. Will the client require a maintenance plan for ongoing work? Is there an agreed upon need to continue updating the website after the project has completed? This is where a fixed monthly fee or retainer can help.

Sorry — there are no magic formulas or special spreadsheets that can generate more money for you. Rather, smart quotes depend upon the myriad of factors outlined above. You will spend a little more time putting a quote together, yes, but the end result will be a quote that reflects not only your availability and resources, but the unique particulars of the client as well.

Finally, freelancers and designers are often given an upper hand in proposal negotiations: setting the anchor. The anchor is the initial project estimate, and your goal should be to make sure the figure you set is slightly above the prospect’s likely price point. Why? Because as long as your anchor isn’t impossibly high, the prospect has to work with your number instead of the other way around, and it’s easier for you to lower your initial estimates than to raise them, especially if you build yourself enough of a cushion.

Tying it all together

To recap, let’s tie together the concepts outlined in this post. First, you should screen out the rotten projects right away. Don’t waste time on them. Second, become a partner in your prospect’s quest for creating a sound website proposal. Have them bounce ideas off you, and learn to critique those ideas without coming off as negative. Third, start developing quotes that take into account the criteria that makes projects what they are — and projects are more than just a lump of hours.

If you implement these concepts, you’ll be less likely to take on projects in which no one is happy, and you’ll help your clients generate feasible ideas that are attainable at a price you can both live with.

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