Serious help required. (1 Viewer)

[GizmoT]

OK here is the scenario.

I have been developing a database for a company over the last few months, and (with a little help from members of these forums) it is coming on nicely. I have already agreed a price for doing the work, but now a new partner of the company wants to get involved. He is of the opinion that a one-man-band like myself should not be involved in a project as important to the business as this is.

So what I need to know, is:

If the company put this work out to tender what would be the likely approximate cost from:

1 one of the major developement companies
2 a middle of the road company
3 YOU!!
4 Another one-man-band.

The database for a finance company is one that collates all customer details. Allows for the input of the customers exact requirements, their credit history, etc. and searches the databases extensive list of suppliers for the products that most matches their requirements. It has high level security, and does away with the need for an underwriter. It has been developed so that copies can be distributed to independant brokers across the UK under license, which generates the company an income in fees.

Now as I say, the cost for this project was agreed in advance, so I cannot change my terms now, but a comparison of different prices would be very helpful to the person who employed me, to justify why I was given the contract.

 

[The_Doc_Man]

With due respect, this is an impossible question to ask of us.

Without the functional specs before us, there is no way any of us serious designers could come up with anything that verged on reality. I can only advise that you grin and bear it. Good luck.

 

[GizmoT]

I suspected that this was a bit of a "how long is a piece of string?" type question, but being new to this game, and never having had a quote from anything like one of the big-boys, I am absolutely in the dark. I suspect however that the big organisations have a basic starting price, be it £250 or £25,000.

I remember before I knew anything about Access (about ten years ago), the company I worked for at the time got quotes ranging from £2500 to £15000, for what appeared to be the same thing (from a totally ignorant point of view) - none of these were MAJOR companies. Needless to say - they went for the quote at £2500, which is why I had to learn more about Access, because the system was virtually useless.

 

[The_Doc_Man]

I won't ask you what you charged. I don't want to know. But I will tell you that unless you are very careful and VERY experienced, you probably did not charge enough for your work.

Those of us who have done projects for a long time (not limited to MS Access, either!) remember the old 80-20 rule.

The first 80% of your work will be done in 80% of the estimated time.

The last 20% of your work will be done in the OTHER 80% of the estimated time.

Since time is money, you can do the math and see you have probably understimated by 60% of your time based on this old rule. It is an offshot of the old Murphy's laws.

Seriously, the fine art of project estimation requires lots and lots of practice. The problem is that your business cannot survive too many bad estimates. And sadly, as a standalone contractor, you have a good chance of making a few bad estimates. This is not a personal dig at you, but just an observation that applies to most small, standalone businesses started by young, energetic people.

In the USA, I believe the Harvard (University) Business Review once estimated that 80% of all small start-up businesses failed in their first year because they couldn't withstand the resource losses associated with their failed projects. It is a matter of cash flow. And if the cash don't flow, your business won't go.

I watched my stepdaughter learn this lesson. It is painful, but I had to let her learn and could not afford to be her underwriter. I couldn't do that and at the same time guarantee that she would have a home to come home to if she failed. So I had to let her fail rather than bail her out.

I wish you luck with your business. I'll offer one last bit of advice. Find a niche market if you can. Supply the niche. THEN branch out of the niche when your business is getting better. That seems to be the BEST strategy, though it is still not at all guaranteed to be a winning strategy. It still depends on you.

 

[GizmoT]

Wise words indeed DM, and I thank you for them most sincerely.

To be perfectly honest, I KNOW I seriously underestimated this project, but since I have yet to FULLY commit to this line of work (still being employed with a "day-job"), and because I knew that this project would be a "door-opener", I expected it to be a loss-leader.

I have truly enjoyed this project, and I have relied several times on answers from these boards, which means that I have learnt a lot. It really would be nice to know though, just what this little project would have cost the company had they gone to one of the major developers.

I know that my next project will be much more profitable than this one

 

[pcEars]

...to justify why I was given the contract.

Sounds like an "expert" or "buyer's remorse" to me. Gathering the info you requested will help. I hope you don't mind if I offer a bit of sales technique instead.

Don't allow this "expert" to fool you. While you can give him some general ideas as to how much your competitiors may charge, it's not a good idea. He will want to shop around, if only to feel more confident in his final opinion.

People buy value, not price. Sounds simplistic, right? Let me say it again, people buy VALUE, not price. Even when they have little to spend, they invariably buy the product which they believe offers the best value, even if they spend a bit more. Make them believe that yours is the best value.

You must re-close your sale. Give the new guy a stronger version of your original sales pitch. Now that you've got some or much of the work done, you can include a quick demo of your progess thus far.

Be sure to reinforce the rapport you've previously established with the client by having the original principals present for your meeting. Reaffirm the points which originally sold the other partner, and you'll find the original helping you as you go. Sometimes, the new "expert" really just needs to assert his position in the relationship equal to his new partners.
There's nothing more quieting to a new "expert" than finding first hand that you've already established a working relationship with the firm.

People seldom say what's really on their minds. A few direct questions will bring out his true motivations for opposing you. Often you may be able to overcome his concerns with little or no cost or time on your part. Of course, it is possible that the "expert" has his own vendor in mind, and won't be easily moved from his position.

The option then is to delicately but firmly remind the client and expert that you do have a contract. Point out that you have done much of the work already, and should he cancel that contract, he will be billed quite handsomely for your efforts thus far. [I trust your contract was prepared by a lawyer, and will hold water in court should you need to enforce it]

Above all be confident in your dealings with the "expert" When it's time to re-affirm their committment to your work, ASK for the committment, then SHUT UP. Always remember: "He who speaks first... LOSES."

I hope this helps, and best of luck!

 

[GizmoT]

I hope that I have not mislead anybody. There is no fear that I will not complete the contract - that much is assured. But the main concern is for the further development that will be required. I see myself as the parent of the database, and I hate to think of letting it go, for someone else to marry it and take it away from me - at least until I have nurtured it sufficiently to be sure it has developed the way I want it to. And I do know that there comes a time for all good parents to let go. The thing is that as the database is allowed to grow - it should provide ample opportunity to make profit in the future.

pcEars - it was nice to hear you reminding me of all my old sales lessons, (no disrespect intended) there are in your post some phrases I haven't heard for many years, and they brought a smile to my face. They are nonetheless always appropriate.

The comparisons, however, have to be made (I have no choice), so I guess I will have to use the prices I was quoted many years ago, and hope that I don't end up looking a fool. The price I quoted for the job WAS very low (deliberately so), but the potential future gain was worth the gamble, and I would do it again tomorrow in the same circumstances.

 

[pcEars]

GizmoT,

Perhaps I've overstated it [thinking that many on the forum don't handle their own sales] but I'm glad to hear your sales experience returns to memory. No offense taken.