[Sigia-l] Freelance IA consulting: Discovering the cost of do ing business

[Victor Lombardi]

At 6/7/2002 -0400 04:49 PM, David R. Austen wrote:
>If you undercharge today, it will be very difficult to ever ask the
>larger amount necessary to stay in business. They'd wonder how you
>could possibly suddenly be worth 20 - 50% more. It's fine to raise
>those fees eventually , very gradually --and you'll need to
>regularly-- but far easier if you know the numbers you need to stay in
>business and speak from the heart and mind.

The scenario might be more complex. For example, say you have one client 
who is willing to pay a sizable fee. You might be able to undercharge 
another client and in the end you still make a profit.

Another advantage of undercharging is to develop repeat business 
("developing a relationship" in the lingo). Perhaps the undercharged 
project is simple, and when the client sees the quality of your work they 
offer you more complex work that is worth a higher rate. If not, then 
perhaps it was a bad investment. But to be so conservative to never take on 
some risk means you might never achieve better returns in the long run. You 
can look at it all as investment strategy, where you're investing your time 
and effort for some return. A more strategic approach might be better in 
the long term.




Victor Lombardi
http://www.noisebetweenstations.com/
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