You’re off to a good start… You’ve had your initial discussion with a new prospect.
They’ve described what they need. And you’ve had an opportunity to ask them more about their project, expectations, and timing.
Now comes the hard part: working up a solid estimate or proposal.
Maybe you’ve given them a ballpark figure. (You DID talk money on the call, right?)
But for some reason, the decision is still agonizing.
How in the world do you arrive at a number to quote?
Over the years, I’ve developed a series of questions that guide me through this process. As I run through these questions and review my notes from the conversation with the prospect, I start narrowing down my number.
Here are the questions I ask myself:
- Is the project well-defined?
- Is it something I can do well (or am reasonably capable of doing)?
- Are the prospect’s overall expectations realistic?
- Is there a realistic time frame/deadline?
- Are there too many parties involved? If so, could this turn into a headache?
- Does this sound like a reasonable person and organization?
- Are they marketing-savvy enough to understand what I can/cannot do?
- Do they sound like they’re shopping around?
- Does it sound like they can afford me? Do they “get” the value?
- Did they mention things about me they liked/were impressed by?
- Can I fit this into my schedule?
I want you to then add a few more questions to ask yourself. The answers to these questions are naturally going to be much more subjective, because they’ll be based on your intuition. But they’re very important because they’ll enable you to temper the answers to the previous set of questions.
Ask yourself the following questions. Those that garner a negative response get a minus and questions that garner a positive response get a plus.
- Where am I in my business currently? Does it make sense to pursue this prospect and this project opportunity right now, based on where I am today?
- Is there an added prestige to be gained from working with this client?
- How do I generally feel about this prospect and this particular project?
- Even if they were okay with the ballpark figure I quoted them during the call, what’s the client’s apparent ability to pay me on time?
- How difficult would it be to secure the business? Are they almost presold, or does it sound like they’ll need much more convincing?
- How badly do I need the work?
At this point, you’ll probably have a good overall feeling about the viability of this opportunity. Because beyond your gut feeling, you also have a series of “pluses” and “minuses” based on your answers to each question.
And you can use these pluses and minuses to move the needle up or down in the fee range you quoted the prospect.
For example, let’s say you quoted the prospect a ballpark figure of $3,500 to $4,500 for a white paper. As you go through the questions above, you start getting a better picture of your final estimate.
Let’s assume that for the most part this looks to be a good prospect with reasonable expectations. Most of the responses are good to very good. There are some potential negatives, and they mostly have to do with the fact that the prospect is still trying to figure out what they want to say about themselves and their value.
You also know that the CEO will be directly involved in reviewing your white paper draft. You’ve been told that he’s very opinionated and changes his mind quite frequently about how the company should communicate its value proposition.
Based on your experience, those are all red flags. Not major red flags, but definitely indicators that this project will involve several revisions and considerable project management.
Based on these factors, you might determine to quote on the higher end of that ballpark range — maybe $4,000… or even $4,500.
However, let’s take a situation where the responses were mainly positive, and the only negative is that the prospect needs a first draft in 10 days. That’s a bit tight, but you’re confident you can manage it. Other than that, everything else checked out and felt good.
In that case, you might feel it’s more appropriate to quote something in the lower half of the range — maybe $3,500 or $3,750.
Once you pick the number, write it down. If you have to send the prospect a quote now, do it.
If don’t have to send your quote right away, pick a number anyway — but sleep on it before submitting it. Look at it when you are fresh the next morning and run through the questions one more time. Then ask yourself: “Could I possibly be undercharging here?”
There’s a good chance you are undercharging. Most freelancers do!
So here’s my challenge to you: If you have a good amount of work at the moment (so you’re not forced to make fear-based decisions), raise your quote somewhere between 10% and 20%.
Seriously! Try it and see what happens. I bet you’ll still get the project. And you’ll have just stepped out of your comfort zone and into a new, happier place.