There are many factors that comes into play when preparing a quotation. Many of the factors relies much on the amount of information you have as a contractor from your prospect.
Insufficient information from a prospective client on the work they want done is one factor that makes the process of preparing a quote difficult. This however, should not be the case if you are dealing with online prospective client.
As a freelancer or a contractor, you have a right to ask for more information from the client. The client on the other hand must cooperate and provide you with all the necessary information in order to prepare a fair quote.
You must be willing to withdraw from preparing a quotation the moment the client fails to furnish you with all the necessary information.
In this blogpost, I will share 5 factors to consider preparing a quotation.
Are you sending a quote to a company that is well know or is it a startup? Irrespective of how good their contract description is, knowing if the company exist should be your first priority.
This involves doing your own research using all the resources available out there. The research will help you cage the company’s ability to gather for the costs for the project besides making the payment on time.
You may find out from your research that the company has good track record in paying their contractors very well.
Time/Duration of The Contract
Based on your prospects brief, how much time will you require in order to work on and complete the work? Is it a long term contract that stretches for more than a year? As they say time is money. Use your experience to estimate the time it will take to complete the project at hand.
The quotation process will be fast and easy when you have an hourly rate that you charge for different kinds of assignments. If you don’t have an hourly rate, consider setting up one. If you already have an hourly rate set, great! Next, calculate the time it will take you to complete the contract. E.g 10 days working for 5 hours daily. That will come to a total of 50 hours. Multiply this with your rate to get the cost service.
Fees & Taxes
Lets first start with fees. Fees varies. It can be the amount that your payment processor charges or the commission that you pay whoever referred to the contract. On the other hand, Tax is the percentage of money that is deducted from your pay to be remitted to your government as revenue.
Taxes for services rendered online are different from the taxes levied on services rendered offline. When preparing a quotation, consider both to avoid getting into losses after completing the contract.
Contingency fee is a fee set aside for use in events or circumstance which is possible but cannot be predicted with certainty. In the online marketplace, it can be the unbudgeted cost that comes in between the service delivery. e.g If it was a video production project, and the client never foresaw requiring more interviews to be conducted for the project and it happens that it has to be done within the approved budget, this is the time that you will have to reach for the contingency fee.
However, it’s important to note that this money will be your profit if no emergency work arises at the height of your contract.
Include Revision Fees In Your Quote
If you offer revisions for every project that you deliver, you must set a reasonable fee to cover your time when you make revisions as needed. Make sure that you deliver the best in order to avoid being asked to make revisions on the project.
After completing the rounds of revisions that you listed in your offer, let the client know how much you expect him/her to pay for other additional revisions. Making this clear before the contract will enhance your quotation besides setting the right expectations for the client.
These are 5 among the many other important factors one needs to consider when preparing a quotation.
With all above factors considered, preparing a quote will take you very little time. Also, you will very confident when defending your quote.
Try as much as you can not to inquire from your peers how much they charge in order to apply the same rates in your quote. Our lifestyles and responsibilities vary. You will not learn anything when you use other peoples rates as yours.
Come up with your own rates, and if you make losses in the process of working, you will know where to adjust. That’s how true enterprises start and grow. You learn from real life experiences.
What factors do you consider when preparing a quotation? Please share your feedback in the comments section below.
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Until next time, bye bye and take care.
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