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Kurt Archer
5,139 PointsCharging/cost scenario with design company
Hey everyone,
I've recently teamed up with a great design company in my city as their lead developer. I'm still freelancing and most of my work with them is hourly. However a couple scenarios have presented themselves where we wish to submit a joint RFP to the client. I'm trying to figure out how I should approach the division, and I have a feeling they are in the same boat.
When I quote independently, I do so at a value based rate rather than hourly. But since I have teamed up with a design company, I am wondering how to divide the "value" based cost.
I have considered just coming up with an hourly figure, but am not 100% clear on how the work should be divided.
Has any one of you faced a similar situation and care to shed some advice?
Thanks!
1 Answer
John Locke
15,479 PointsHow does the company normally set prices? If they do value based pricing also, and the division of work is set to be near equal, then go to the design company, propose an equal split on value pricing.
Who negotiated the deal with the client? You or them? That's who has the advantage in the price negotiation. But you both have to agree on something so that you can send your proposal.
If your current gig with the design company is as an hourly employee, this might be a huge leap for them, and for you.
In a lot of ways, I like value pricing, except when the scope of my work extends way beyond what I would have estimated at the beginning of the project. It depends on how big this project is, and how much money it takes for you to live, and how much time you'll have left in each week to make money.
If the design company currently pays you hourly, that might be easiest, but make sure that no matter which way you go, that you're compensated fairly, and that the design company doesn't feel awkward about the financial arrangement.