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

[David R. Austen]

Hello, Erin:

I enjoyed your response.

With non-profits, I usually just take out my check book and make
tax-deductible donations when I believe in the cause. And when I can
afford to donate.

:-)

I expect that non-profits pay the same rates as Microsoft for pencils,
power and personnel. If we **could** negotiate buying our equipment
and supplies and utilities and dentistry, I doubt we'd get very far
saying, "But, but my only client is a non-profit!"

When I was a student, I discovered a common misconception. Graduating
students thought they would be underpaid working for non-profits. And I
doubt that donors to these non-profits would expect the general
manager to underpay executives "for this really good cause." In many
cases there **are** no donors, of course. (Oh, perhaps a few IAs who
give them a price breaks.) Often all funding comes from tax dollars!

By any means, ones friendly and cheerful response can always be,

"Unfortunately my consultancy is not incorporated as a non-profit, and
anyway my accountant wouldn't approve."


Best regards,

David                           

http://zillionbucks.com -- Web hosting for the creative industry

Friday, June 07, 2002, 5:26:32 PM, you wrote:
EM> I would have to respectfully disagree about this one. Undercharging just
EM> perpetuates the notion to clients that this type of work is not worth the
EM> same amount of money as other professionals  and their work. It also
EM> undermines rates that are fair and competitive by others in the field.

EM> There is a going rate that some things cost - give or take a bit. It is
EM> important to find out what that fee is and stick to it. You may start out on
EM> the lower end of the range, but the range ensures that the entire profession
EM> as a whole doesn't go down the drain because clients think they can get it
EM> for free - or that it must not be very valuable because people are giving it
EM> away.

EM> In my own work, (in house for most of the time) but working freelance for
EM> some projects, the only people I give a break to are non-profits. These
EM> people generally don't have a lot of money and any they do have should go
EM> back into the service they offer - so I charge a reduced rate - but I still
EM> charge.

EM> erin

EM> On 6/7/02 2:08 PM, "Anders Ramsay" <anders at nyc.rr.com> wrote:

>> On 6/7/02 4:52 PM, Victor Lombardi at victorlombardi at yahoo.com wrote:
>> 
>>> 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.
>>> 
>> 
>> I would agree.  The best long-term strategy if your portfolio is thin is to
>> take on any and all work that will enhance it, and to do it for any price
>> (though of course you would not want to let on to that while negotiating a
>> fee.)  You're essentially investing in your future.  And if you do good
>> work, that gives you more leverage to ask for more money for your next
>> project with that client. Or if it's with a different client, all they need
>> to see is your work, not what you charged for it.
>> 
>> -Anders

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