Project Pricing Help

[wookie224]

I have been approached to create an application for a company to track inventory using a bar coder and do some database stuff too. Basically when a product comes along the user scans it against the database and will prompt the user of the status and whatnot.

(Still working out the details)

Problem I have is that I am unsure of the amount to charge. I don't think the client would like the hourly approach due to not being able to budget. I have seen other posts but thought I'd see what I can get out of it.

* The product will not be resold.
* Probably be run on 10-15 computers.
* Will definitly help the day to day running of the business.

Any help or suggestions. I saw one post that broke it down into stages and and estimated the hours and it ran about 5000.00.

I have made software before for a friend on the side and his company bought it for 69.99 a copy.

And since I have been out of work since christmas.. I need all the work I can get.

Wookie.

[gaffa]

Work out what your hourly rate would be (the amount you want to take as a wage), add on 30% for overheads, and another 30% for profit/leeway/fudge factor.

I guess a reasonable hourly rate as a single controctor is probably about $40-$60/hour.

So if the job is 5000 hours (which is very substantial - that's 2.5 man years, and as a single developer, that way, way too big to be realistic), then the base rate is $200,000 (at $40/hour), plus the overheads/profit margin of $60000 for each takes you to a total of $320,000.

That's a pretty big number, and to be honest, not overly viable for a single contractor.

That said, custom written software is VERY expensive, and I've yet to see a reasonable size job (of the type you are talking about), be realistically written for less than ~$50K. That assumes you write the whole thing from scratch (not re-using code libraries and the like).

Sometimes you can reduce the cost by buying a whole pile of components, using code libraries and the like.

The important thing to remember is that if you under budget (and anything less than $10K is probably tool little), then you'll end up working for nothing. I've done that before, and tried very hard since then, with varying degrees of success, to price my applications properly, but it's not easy.

The single biggest killer will be the changes the client wants as the system is built - they will see what you can acheive as a programmer, and start asking for more and more features, generally without being prepared to pay for those changes.

- gaffa

[John McKernan]

Originally posted by gaffa
...The single biggest killer will be the changes the client wants as the system is built - they will see what you can acheive as a programmer, and start asking for more and more features, generally without being prepared to pay for those changes.

- gaffa

Be sure to protect yourself here. Be sure to get in writing, in advance, exactly what the job involves and how much lee-way the client has in specifying changes. It's a good idea to include in the written agreement, a procedure for the client to submit requests for changes. As soon as a change is requested, and before any work is started, be sure to get a written Change Order in effect. The client is never prepared to pay for changes if you don't iron this out up front!