Custom Application Development

Oct 8 2008   6:00AM GMT

Service Pricing Thoughts for the Independent Developer

SJC SJC Profile: SJC

So here we are — the stock market still sliding downward  (…or is it a free-fall?), unemployment rising, IT jobs being cut, and seemingly unending bad news on the economic front!  If you are on an IT payroll somewhere, you may be concerned about your future with the company – and rightfully so.  If you are a contract or custom software developer you may be worried about where your next project will be coming from, or if not that, perhaps whether that project you’ve been working on will be safe with all the cuts going on.

These are decidedly difficult times, and it looks like they won’t be going away very soon.  If you are a custom application developer what is your next step?  What will be your future?  How do you sell your services?  Will you be able to?  …and for how much?

My recommendation regarding your service pricing during this time is “Don’t Discount!”.  Yes, potential clients might be looking for bargain basement pricing, but as an independent who offers a valuable service to your clients it is best that you maintain your value.  If you are one who quotes hourly rates especially don’t discount!  My recommendation is to get away from the hourly pricing and instead make it a practice to set a fixed price for a well defined task.  Base that fixed price upon your best estimate, but make it a price that will be attractive to the client — and then get the job done well when its yours.

I’ve found that often a potential new client doesn’t stop to think about the extra expenses that an independent is faced with — and I don’t hesitate to remind them that much of my education which allows me to provide them with my service is the result of many hours and dollars invested in training programs, software and hardware.  Every new software release must be tested, software updated, tested again, and new functionality learned — all during non-billable time!  When a new operating system is released that too adds to the non-billable time spent in educating self. 

It’s easy to forget what it takes to provide quality service to clients, but you owe it to yourself to value your services properly.  Did I remember to say “Don’t Discount”?

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