[thelist] development time cost on new functionality

[Matt Warden]

On Thu, Jul 14, 2011 at 12:54 PM, Simon MacDonald
<simonmacdonald at uk2.net> wrote:
>>>Unless you are positive you will be able to reuse the code elsewhere,
>>>you need to price to recoup costs/make profit the first time around.
>>>Subsequent uses can be priced just the same, since client B still needs
>>>to value your time and experience.
>>
>
> I pretty much agree with Patrick - though I would charge slightly less for
> subsequent usage.

Why?

Does Ford sell the second car it produces at slightly less? Does
Pfizer sell the second bottle of pills at slightly less?

This is a common mistake for services guys who aren't used to fixed
costs. When you sell the second time, that isn't a service. It's a
product (or "solution", if you prefer). You are not selling your time.
You are selling something that solves their problem and your cost to
implement that solution provides only a floor to your price range.

Now you absolutely do not want to bid the second project on an hourly
basis. That will either leave a ton of money on the table, or leave
you in ethical soup. Fixed price. And say it as if you're doing them a
favor in structuring it that way to give them some budgetary
certainty.

-- 
Matt Warden
http://mattwarden.com


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