Need suggestions for deciding price for freelance MIS Applications in Excel

Dear Forum,

I am making a small application for a Small-Medium Sized business and do not know how to fix the price for the same..

I have always helped people without any monetary benefits, however this is a project will require a lot of time than some formula help..

But since I have never charged anyone before this do not know how to quote the charges..

Would appreciate some suggestions and also if someone could share some templates where I can form some parameters..

My Applications would be made in MS Excel and therefore thought of putting the query in the forum though I know very well this is only for Functions & Formulae Help..

SInce this is related to Excel I didnt know where to seek suggestions, please pardon me if this is agains any protocol..

Warm Regards
e4excel

Wow got to know of this Water-Cooler link..

Hope to get a reponse too as it seems this is a less frequented domain..

I'd start off with working out an hourly rate for your time and make this the opening point for negociations.

If you want to provide a fixed-price quotation then I'd insist upon a written specification. Ideally for a small, ad-hoc project this should be written as a list of testable statements. For example, a specification which says, "Write a time recording system for 100 users" is bad, because that could be a 10 minute job or 10 weeks of coding, testing, user testing, re-coding, bug-fixing, etc. A better spec could be along the lines of:

1. Users must be able to select their user-name from a drop down list.
2. Users must be able to indicate the week for which they are entering hours - the week should be in the range from the current week back to 3 weeks prior to the current week.
3. Users must be able to enter a project code to book their time against.
4. The system must validate the project code and warn the user if it does not exist
...and so on.

You should make it clear up-front that any additional requirements not in the spec will be charged on a time & materials basis. Where most IT projects go off the rails is through the poor management of specification changes, having a written spec you can point to and say, "That isn't what you asked for" is worth its weight in gold.

Before you sign-off a spec you should always read it with your coder head on and think about how you would implement each requirement, if there are any ambiguities then get the client to clarify *before you start coding*. For example, a requirement which says, "The system shouldn't let contractors allocate too many hours to admin tasks" needs to clarify how many hours equate to "too many", how an admin task is identified and how it tells a contractor from other user types.

The idea is that once you've finished coding you can run through an use each item on the spec as a test ... Can I select my user name from a drop-down list? Yes, test passed.

If you're working on an hourly basis then ensure the client gets regular updates on progress. As soon as you code a new bit of functionality show it to them and let them confirm it's what they're after. If you put in 100 hours and then show them something which is miles away from what they wanted then they'll be peeved about paying for another 100 hours to have another bash at it.

Also try to avoid coding big, monolithic blocks of code. As much as possible code everything into small subs and functions that each do one specific task - this will make fixing bugs and making changes easier. Also avoid coding literal values - either code in constants or have them passed as parameters, even for things you're 99.99% sure will never change.

HTH.

Oh, the things that you're 100% sure will never change will have changed before the ink's dry on the spec, that's why I set the cut-off at 99.99%.

I worked on a government project a number of years ago where their whole new business model was based around allocating all incoming work to one of 16 types of team.

At the initial planning/proof of concept/high-level design stage I had a lot of conversations with them along the lines of ... Are you sure 16 types of team are enough - Yes. What about work that doesn't seem to belong to any of those 16 types - We'll allocate it to one of the 16. What if you want to add new team types in the future - We won't, those 16 are all we'll ever need, etc.

The system went live, two years later, with 96 team types, although we did trim that down from the 112 we had at one stage.

Roy UK,

Thats very disheartening to know, can u tell me some workaround, that it becomes somewhat difficult..

One school of thought suggests that an hourly rate calculation can be done in the following manner..

Hourly Charge = Expected or Anticpated Income per year
______________________________1000


But I am still not able to understand, how do I assess the actual no of hours spent on the project and convinve the same to my client...?

Please if there's any kind of Template , it would be really helpful to have something handy...
I am feeling this is more complex than the project itself...!

Untold millions of pounds/dollars/yen/whatever have been poured into stopping people copying software, but you can still pick up a copy of MS Office at every car-boot sale (or yard sale in America, I guess), so your chances of stopping your work being copied are slim, I'm afraid.

Your only real option is to make it clear, in writing, preferably on a document that somebody from the client organisation signs, that you retain copyright of finished product and that while you grant an unlimited licence for use within the client's organisation the product is not to be re-sold, passed to 3rd parties, copied, etc., etc.

Of course if they do breach your copyright you've got almost no chance of finding out and even if you do the cost of a private individual bringing a copyright infringement suit is likely to be prohibitively expensive, especially given the risk that it will fail and you'll be left picking up the bill for their team of 50 lawyers that they used to fight the case.

Anyway - the issue of fixed price vs hourly rate is a more straightforward one. They'll almost certainly want a fixed price, or at least an estimate of how many hours you'll spend on the project on an hourly rate. Unless they have a spec, or can describe a very clear solution to you that you can document then avoid fixed-price like the plague. Even if they do have a spec you'll have to judge for yourself whether you've got enough Excel experience to translate a spec into required hours.

Whichever way you go make sure you keep a log of every phone-call/e-mail/meeting where there are changes to the requirement, so when you over-run your time estimate or need to up the fixed price cost you can explain why. Always document who the change came from, the date it was requested, how it was communicated to you and any estimate you made at the time for additional time/cost.

My recommendation would be to go with an hourly rate - don't price yourself out of a job and resist the temptation to pad the number of hours you put in ... you might want to come back to this client for a reference or further work in the future.

If all of this hasn't depressed you enough you also need to consider support charges - Excel sheets based around formula are inherently harder to support than Excel applications based on VBA. Formula are very susceptible to user error (i.e. over-typing a formula, entering invalid values, deleting entire sheets) and it's very hard to make them sufficiently robust, you have to rely upon protected worksheets and locked cells, which can be a pain.

Normally once development is finished you have a period of User-Acceptance Testing, after which the client signs-off the system to confirm that it is delivered and working to their requirements. Make it clear that after that they are into a support cycle where fixing user stupidity, adding new functionality and providing bug-fixes is chargeable work.

Above all else remember that the purpose of this exercise is for you to end up with more money in your pocket than you had at the start - your clients should respect that you aren't doing this as a labour of love and that pushing for more money because the spec changes or to provide support is you acting as a business-person.

Best of luck.

I honestly don't think you are going to find something as straightforward as a template where you can just fill in some blanks and it tells you how many hours it will take or what price to charge. If you can develop such a template it would probably be worth hundreds of times more than the project you're actually undertaking

There are methodologies for software development based on estimating the number of lines of code and working out a development time from that, but (a) they're not strictly relevant to you, as you've said the main body of the work is going to be formulas and (b) most of the ones I've seen seem to be little better than educated guesses anyway.

The formula you've got relies upon you deciding what your annual renumeration rate should be. If you think your skills are worth, for example, $80,000 per annum then you should charge $80/hour. This is a decision that only you can make - there's no template to tell you what you're worth (and I'd be too scared to develop one in case it told me )

As this is your first job you might be best to pitch your hourly rate fairly low and accept that some of the pay-off from this job will be in the form of the valuable experience that you'll gain. You should also remember that there are approximately 37,000,002 Excel experts in the world and that if your client bothers to look they'll find somebody, somewhere willing to do it for less than you.

Dear Andrew-R,

You have been of great help, however the problem is I dont know anyone who has worked on a pure Excel project free-lance as my life was confined to my own work at my workplace..

So to quote any amount, I need to know the Market Price which is slightly on the difficult side and the other things is whatever i quote has to be digested by the client and therefore I was looing for some pointers which can enable me to come up with something which is more close to a feasible price for both...

Though its my first project and also know the client very well and know for sure that there are less chances of the work being given to someone else..

My only concern is whatever is quoted can be quantifiable..

I just need to know of how can I calculate the BAsic Expense Heads and then add a small amount of profit to it..

Why don't you give us an idea of what the project is and I'm sure that some of the gurus here will be happy to estimate the complexity and development time. That should at least give you a starting point.

Dear Andrew-R,


I have not received the specs till now, as soon as I get them I will share it with the forum but thought before the same I could do some groundwork at tmy end...


Warm Regards
e4excel

But....hey man, where's the deal?

I wouldn't mind a slice off that, ......nae, a crumb off that! ...

Burp! ... beer, yet again....

I can only dream..... (of more beer)....

Originally Posted by martindwilson

i hope i'm not in that! make it
37,000,001 lol

No, I hadn't counted you - 37,000,002 it is.

Seriously, though, about a year ago I came across a web-site called PeoplePerHour, where anybody who has a small IT project can post some details of it and site users can submit bids to do the work. It seemed like quite a neat idea to me, so I signed up and decided to bid low for a couple of projects just to get some reputation on the site.

There were Excel projects that, while they weren't terribly difficult, did represent a solid day's work. Given that the site charges about £10 commission per job I was pitching in at about £30 and still consistently getting under-bid - there were people out there willing to do a full day of Excel development for less than £20! It really is a buyer's market for Excel skills out there

Originally Posted by Simon Lloyd

This forum is awash with MVP's and brilliant people who have and are still helping YOU with your quandries. I feel i have to say that you need more time and experience before you produce anything for sale that people with a little knowhow, a little experience and careful questioning could produce themselves!

This may seem strong but thats how i feel after reading this thread

Dear Simon,

I am not claiming to be a an Excel Expert at all but learning with every new endeavour and believe a lot of credit goes to this wonderful forum...

I was not even expecting any remuneratiion honestly but the clients insisting to avoid any obligations, I have always tried to help people whenever and wherever I can..

I was trying to get an idea incase if I have to charge, whats the best way to do that! based on what parameters as this is something I have never done in the past..

P.S. This particular oppurtunity is through a friend and therefore such a delay as there it lacks a professional touch..Ideally I was expecting the specs by last week and max by yesterday however, its just that the client is a little too occupied...

Warm Regards
e4excel

I'm guessing that the OP has some kind of personal connection with their client, which is why they feel that the client won't go somewhere else. I've done a few little projects for friends on the same kinds of terms and my experience has been:

1. They almost always vastly underestimate the complexity of what they're asking for. You can see this demonstrated on hundreds of threads on this forum - somebody asks for something that sounds like 2 minutes work, and then they come back and explain that isn't *quite* what they're looking for and the complexity escalates.

2. As a result of this the development cycle is a loop of design - code - user test - new requirements, lasting until one or the other of you loses the will to live.

3. Payment tends to be in alcohol.

As a prime example, a friend asked me how long it would take to merge a few spreadsheets together and weed out any duplicate entries. I told them it wouldn't take long, a few hours at most. Then it turned out that, although the spreadsheets held (roughly) the same data they weren't in anything like the same format, so, say, some of them would have a "Name" field while others would have seperate "Surname" and "Forename" fields.

Then my friend wanted to not only delete duplicates, but track which of the original sheets (of which there were dozens) had contained the duplicate entries.

Then I discovered that some sheets contained duplicate entries themselves. Then that all of the sheets hadn't had any sort of data cleanse activity, so some of the sheets with seperate surname and forename fields would have some entries where the whole name had been put into one of those fields, or both of them.

All in all I probably put about 50 hours into this ten minute job and I was rewarded with 2 bottles of wine. They were, to be fair, pretty nice bottles of wine and they probably cost about £20 each, but that would still put my hourly rate somewhere lower than I could have achieved by standing with a tin cup asking for spare change

Dear Forum,

The intention of doing this project is more to do with doing something completely new to that industry as far as my observation goes, the client is not conversant with Excel and has not utilised Excel to its true potential of Databse Managemnt as his business is still resorting to the old methods od paper files..

This would also give me an edge in terms of diverse experience in my CV..
Money came into picture due to lack of clarity on the clients part as he himself is not aware of what all things can be possible using good Applications and requires more time to understqand what all things he wants..

Had it been a small file with a little formula help like VLOOKup, Average and some Graphs here and there...then I would not have even thought of monetary benefits however due to a long involvement it has come into foray...

I appreciate the time everyone has taken to share their valuable experiences with me..this indeed is very useful..

Making a template calculating the Hourly work is indeed more complex than the project..

Even while simply helping out people who are not completely familiar with Excel's true potential, I ahve had faced similar situation wher a simple 15 min job has consumed more time in organising the files as well as adding more value and finesse...

So, understandingyour own worth is very important...

My other concern is that I will be only using Formulae and not VBA...as I am not good in VBA...so will that be a dampener!...


Please, I humbly request if anyone has a Template or a theory of arriving at the FIxed/Hourly rates, please do add to this post..

Warm Regards
e4excel

There's no problem with using formula to build the application, but remember to lock all cells with formula in and protect the worksheet, or one of the users *will* type over them.

As for payment - as I understand it you were willing to do the job for nothing and the client (who is a friend) is inisisting on paying you. If you're mainly looking for the experience then, rather than worrying about an hourly rate, why not just pick a charity and ask that your client makes a donation to that charity in lieu of payment? You still get the experience, your client gets their application and a cause that you care about gets some funds - all without anybody having to haggle about money.

Dear Andrew-R,

I am still willing to do it for free buts its not like a one-day job but an ongoing process so investing so much of my time will not make sense.

My main intention is to gather experience but it's my observation when someone helps us selflessly people tend to care less and do not appreciate the efforts..

The so-called client is an indirect friend and therefore it would be best to have some remuneration to keep things under control...

In future, when I do start working freelance whenever that happens this experience as well as the strategy to come up with a competitive quote would always come handy..

Neverthless, even while being on the other side of the river i.e client would also help to asssess a better vendor..

So please please if anyone has any ideas to include some heads in expenses please do so, I can base these details to form something which will help for the final design...

Warm Regards
e4excel

Or put bluntly,

How much should I charge my client for this work, that you have given me for nothing?

Here are a few words of wisdom to consider.

1/. “There is hardly anything in the world that some man cannot make a little worse and sell a little cheaper, and the people who consider price only are this man's lawful prey.”

2/. “Quality is never an accident; it is always the result of intelligent effort.”

From
John Ruskin (English Writer and Critic of art, architecture, and society, 1819-1900)

Not sure he is on the Forum, but if he is I suggest you give him some Rep+

Originally Posted by romperstomper

You would seem to have just shot yourself in the foot with a comment like that on a site like this...

RomperStomper,

It was not for the site interaction, I meant when you help someone as friends it does happen that the person does feel that Oh! this guy can jut work for me whenever I want him to...

Not everyone's like that though its better you draw the line somewhere, don't you think!

As far as this site goes, its because of this helping virtue its still going strong and the ones who have received help have shown the same gratitude...

Warm Regards
e4excel