Entries Tagged 'Estimates and Proposals' ↓

Over the last few years, new services such as ifreelance.com have sprung up, and revolutionized the way people who need sites, find people to make them. Be mindful of the buzz-word “revolution”. As an experiment, I signed up for the service to give it a solid evaluation. Here is how the system works. A freelancer, pays a small fee and lists themselves in a category. There are 15 categories, and you can buy all of them if you choose. I signed up for one category, and every day there are like 5 new projects.

…in software development, design is undervalued. Often no user interface design is done, or it’s considered a formality. - Jeff Knooren

How The Service Works

New projects are presented to you, and you read the description someone has posted about what they want. This person, is referred to as a Buyer. You, as a Bidder, fill out a form and give an estimate of what you think it will take to do the project, and you quote a price. Bidders will see their bids as either won, or lost. In the last three weeks I’ve bid on 100 projects. As of today, my record is one in seventy one. That is, I’ve officially won 1 project, and lost 71. If this were boxing, I would one win above a punching bag like Mike Tyson. To the right you will find a graph showing most of my bids, are comparable to others using the system. So far, I don’t think this is the best use of Bidders or Buyers time. Here is the breakdown:

Replying with my estimate took twenty minutes at the very least:

• 100 bids @ 20 minutes = 2000min (or 33 hours)
• 1 Win @ $500.00 (Project took 17hrs to complete)
• 50 Total hours / $500.00 = $10hr

So, in other words, it took me 50 hours to win a single project and do the work. That averages out to $10hr. But also 33 hrs in providing free quotes. The ratio of wins/losses needs to be 2hrs, and not 33hrs to be worth it. Again, it’s not the price of $10 membership, and there is no shortage of projects to bid on. It’s the time wasted in bidding that is the real cost of using the service.

As a Bidder, no matter how much time you spent preparing, or how accurate your estimate is, a buyer is gone with one mouse click. Why? Was it something you said, were you overpriced, didn’t give enough info… there is no explanation. Sometimes Buyers do complain that Bidders didn’t give them enough info. But most of the time, even the most well thought out responses go nowhere. As a Bidder, it isn’t practical to give anything more than cut-n-paste quotes, because you’ve got 4 other projects to bid on.

From The Buyers Perspective

Shopping for computer services online is nothing like the real world. In the real world, you’re encouraged to “Come down to our showroom for a free quote”. Because whatever the business is, knows you’re more likely to buy when you’ve taken the effort to drive to the showroom. Or, gone to three other showrooms, and all the prices are pretty much the same.

If this were boxing, I would one win above a punching bag. - Jeff Knooren

On the internet, the buyers want you to bring the showroom to them, with an unlimited number of bids or price quotes. I can see why this is convenient, but everyone looses. The automated bidding process has turned into competition, like for a home mortgage. That system works for mortgages, because they’re one-size-fits-all solutions. The buyer is not in a better position with 100 project quotes. You should need no more than 5 quotes personally tailored to you.

Summary

Services like ifreelance.com sound like a good idea. Honesty and transparency must be at the heart of how a Bidder prices a project, and what a buyer expects to get for the price. But the only way to win bids, is to lie about the prices and timeframe. Spending an hour to prepare an estimate, along with 100 other people isn’t a productive way to do business. And too many quotes result in a lot of portfolios to look through, and references to check, and time wasted weeding out the ones who can’t do the job.

There are many way to keep track of the time you spend. It should go without saying that, you have to keep track of the time working on a project, so you can bill it to clients. But I recommend, even tracking time spent NOT billable to clients. Reading emails, training, YouTube videos. For instance, writing this post I’m tracking the time it takes to write, format, and publish this article.

“Make an example for me, and if I like it, I’ll pay for it”. If I had a nickel for every time I’ve heard that adage… - Jeff Knooren

There is no shortage of time tracking applications out there on the market. I won’t even attempt to list them all. Whatever method you choose, be sure it is easy for you to start and stop your time. I decided to build my own, because I’m a masochist, but also because I knew that if I couldn’t easily starting and stopping time, I’d never use the application, no matter how cool it looked.

Time Tracking database

I used MS Access to create a database to store entries. I simply “punch in” and punch out when I stop or start tasks. Of course, there is a field for entering what I’m doing. Sometimes I put detailed information on the task I’m working on. Usually it’s just a few sentences which serve as a reminder, when I print out a time report. Here is what I came up with.

What the buttons do

1. What project is this, and buttons to create new projects if they’re not available in the list
2. Time entry for current item, with buttons to automatically insert the current time
3. Create a new entry
4. Reports
5. LOGIN keeps track of my passwords

When it’s time to bill clients, I select the project from the dropdown box. If there isn’t a new project, I create it. I won’t show every step in the process, or all the features of my program. And this doesn’t have to be a fancy looking piece of software. The important thing is that I can add projects easily. That’s really the key to all this. Tracking time is boring and tedious, so make the process of doing it as easy as possible.

Here are some tips to keep in mind when billing clients for time:

• Many clients are surprised by how much time it takes to create a website. Good reports combined with a professional time log will alleviate most concerns. Most importantly, it might highlight time is being wasted, because someone continues to change their mind.
• Include your hourly rate in your contracts, and perhaps on your website. It will dissuade some people from haggling over your rates if they see that your rates are firm and universal.
• When you set your hourly rate, choose the increment of time you will round off to as well. Early in my career, a client asked me in what increments I billed. I told him that I billed in 1/4hr increments. I’ve since discovered that I prefer to charge by the minute, with a thirty minute minimum.
• Don’t fudge the billing. I’ve heard web designers who decided that some clients deserved to be charged extra, and the easiest way to do that was bill extra hours. The reason not to do this; If you were an employee, you might get fired for surfing internet porn at work. As a contractor, they’ll demand you pay them back. It’s just not worth it.

“Make an example for me, and if I like it, I’ll pay for it”. If I had a nickel for every time I’ve heard that adage… - Jeff Knooren

Reporting

The whole point of tracking time, is to generate reports about what you’ve done. The reports are available in various formats, such as on screen, or exportable Word documents. I only need to generate three reports. The a dump of the entire log, breakdown by Month/Week, and a specific item, like “blogging” or “design”. Here is a sample report, of how much time I’ve spent blogging on my website. Again, nothing fancy:

Notice there are prices here. That was one thing missing from every time tracking application I looked at. There wasn’t a good way to put in dollar values. As you can see, the report calculates prices based on time and hourly rate.

Bonus features

One of the good things about making a time tracking application from scratch, is that over time, you can make small improvements to it as the need arises. For instance, the LOGIN button here keeps track of all my passwords and logins for websites, programs, etc…

Summary

Time is often equated with money, and just as we often find ourselves short of cash, we also find ourselves with short of time. This post took 2.5hrs to create. If I paid myself a salary, I should’ve gotten at least $120 to write this article. To understand where your time goes, it is important to assess how you actually spend it. One way to do this is to keep simple operating records. For this purpose, record activities and accomplishments during a typical week, This should give you a start in observing your time usage more efficiently.