Xojo is beginning to present a challenge to both my billing and my sense of right and wrong. It’s so dang easy these days to reuse and extend a class I previously wrote that I’m getting projects for my clients done too quickly. The code is worth much more than the time it’s taking me to accomplish. This presents a moral dilemma. Do I charge what it should have taken? Or what it actually took? Darn you, Xojo, for making me so efficient!
Perhaps you should charge per feature rather than time?
The question, was, is, and always will be - What is it worth to your client?
The worst business day of my life was when after spending a summer developing an order entry / billing system for a client they told me the lowest quote they had gotten from the “big boys” was $180,000. I ended up charging them about $35,000.
On the plus side they were my biggest client and best reference for about 8 years before they were bought out.
You should make a quote which is comfortable for you writing the app from scratch.
And than if you get it done quicker because you can copy and paste, you have a benefit on your side.
Back in the day when I was a web developer, I had various libraries of stuff which I could use, which I’d written before but which were useful. When I found I was simply reusing stuff like that, and my projects were taking less time, I simply upped my hourly rates - talking about why with my existing clients.
Another way of doing it is to put a value on the libraries you’ve written - probably about 1/4 - 1/3 of the value of the hourly rate it took you to write them - and then add that to your existing hourly rate.
Figure out what they will pay and then add on a 20% gratuity. Your customers want the value of what you’ve done, not a receipt for your indentured servitude measured in hour hand circuits around a dial.
I am not so sure Xojo is the only reason why you are so efficient. Have you calculated the countless hours you have put in research ?
The client is paying for your experience so I don’t think it unreasonable to consider your tool chest as part of your competitive advantage. For similar reasons, I tend to put a base cost for doing something in a project.
Example: All the work we’ve put into ActiveRecord and ARGen save me tons of time for db programming (which is 90%+ of our projects) . So I have a base charge for db projects. It’s still not as much as if I had to do all the coding in native Xojo but more than nothing.
I like this idea. It works the same way as a car repair.
(Made up numbers, but you get the idea)
[code]Labor 3.0h x 100
Parts 4 x 75
Total: 600[/code]
Very good analogy Tim Parnell! I’ll have to remember that one next time I give a consulting presentation.
I like the “knowing where to hit it” story myself.
[quote]There is an old story about a multi-million dollar power plant that had mysteriously ground to a halt. All efforts to restart it had failed and an expert was brought in. After studying the problem for a few minutes he took a hammer and hit one of the valves. With a rumble, the plant came back to life. Incredulous glances were shared, grateful cries and high-fives were exchanged. Later, the experts bill arrived for the amount of $10,000.00. The outraged executive in charge thought All he did was hit a valve with a hammer, this bill is ridiculous. he asked for an itemized breakdown and the consultant responded with a bill that read: Hitting valve with hammer $10.00. Knowing which valve to hit: $9,990.00.
[/quote]
My OP was a tongue in cheek shout-out to Xojo of course, but I like the discussion it sparked. Bottom line: value your time AND your expertise. I always try to put a value on the function and quote it that way, but there are too many times when I wind up in the situation I described and I have to remind myself. Over and over.
Of course in the car industry they charge for the “prescribed” amount in labor hours (especially at the dealership). If they get it done faster, thats just more profit for them. Eg. dropping the transmission should be a 5 hour job according to “the book”, but experienced techs can do it in two thirds the time. That makes the service department’s manager a happy person around the time they are passing out bonus checks.
Wouldn’t that mean they own your reusable code?
- Karen
I’m assuming you mean the client? If so, our contract states that some parts of the code is not exclusive to their project. I’d hate to rewrite my preference class, db classes, etc. for each client.
This is called Tools of the Trade. They get a non-exclusive license to do anything they want to the source code other than calling those parts ‘theirs’ and reselling it (the source code).
Well that is Entrepreneur risk I would say… sometimes it is against you, sometimes with you.
But do not take it all… give something back to your customer if he is graceful to you too.
Do not see him as a customer but more as a partner.
Always charge the value of the product. It’s not a matter of how much time you spend, but how much it’s worth to your buyers.
Charge them of course I never got a discount for MS Office because its development was finished before scheduled .
Its development was never finished before scheduled. 
Ahhh . that’s why!
Hi Tim,
In a related area the STEM world this is a dilemma has been standardized, as an example the Consulting Engineers of Alberta have a rate guide Rate Guide, with the latest rates for 2014 Guideline.
Relating this to Xojo, a new computer programmer would take more hours to perform a certain task and will charge out at a much lower rate (Example $96.00 /hr). A Senior Specialist has many years of experience and charges at a significantly higher rate ($345/hour). The classification guide and the discussion of Professional Services and Technical Services provides a guideline as to the experience level.
According to the math economics, an experienced professional should take less time to do a project by a factor of 3.6 ($345.00/$96.00). The reason for hiring an experienced person is that there will be less callbacks (fixes to running code) which is more reliable that a junior person creating code.
A client may not appreciate the rate of $345.00 per hour, and it may be more palatable for the client to pay for more hours at a lower rate, which provides your personal company with the same amount of funds at the end of the year. Because you are more efficient, your personal company will be able to have a higher revenue (less time to perform the same work at a higher rate).
Just my $0.02,
Eugene