How to handle this opportunity? (long Q sorry)?

Question

...I have done some consultancy work for a company (development of a washing system prototype) who now want to commission more work. They want a device made that will be ready to show to prospective buyers and by April. To take this on I have estimated 6 months work at 2 days a week plus costs etc and I think this has been a shock to them. They may feel that having done the previous job (very economically) I now can use that as a lever to secure a very lucrative deal (as I made version 1 I am in a good position to do Version 2)....Its tempting to think like that but the truth is its a massively complex bit of work and needs lots of time. Any thoughts on how to 'play ' this so that I neither appear desperate for the contract nor as if I have them in a corner....? Thanks

Answer 1

I'm totally with your thinking....

I recently did a Small Business Server with Clients at a low rate, due to being recommended by a friend.

Now, they keep adding things to the workload, one after the other - and I don't wish to work for that rate!

The list of tasks has more then doubled.

I actually just told them to contact a well-known software company for further assistance - making sure that I got paid first!

So tell them straight, you did them a favour, but you cannot live off of those previous rate(s), and that you would only be too pleased to assist them further, should they accept, what you consider to be a very fair proposal.

Good luck - and mail me on how you get on!

Answer 2

I would like to presume the people in this company are business people, and business people have a tendency to be down to earth and realistic about things. It is only natural that you would think of this scenario, as indeed, you are in a very strong position.

Unless you know of a competitor who can work faster , better and more cheaply than you, you have what could be called an absolute monopoly.

The trick is to go into the details and to be frank about the realities you are facing, it could well be that they are not aware of the amount of effort that will need to be produced to materialize the second prototype.

You could try to produce an event calendar, reproducing the exact amount of events you estimate you will have to sequence in order to obtain a result. This will allow the company to come to terms with the enormity of their request and help them to calculate their own risk more adequately.

It will also make them understand that you are willing to play fair and that you are not trying to leverage yourself into a very lucrative deal, but that they will be getting their money's worth.

I would opt for a weekly calendar, explaining the different stages of development you have to go through. I would also calculate  how much gain is realized because you have already created prototype number one.

I imagine you will have to go through different phases of development:

Inventory of Prototype 1

Disassembling-assembling

Inventory of improvements

Designing of improvements

Building and redesigning to prototype 2

Testing

Refining of process

Debugging

More testing

Inventory of prototype 2

Consulting with company

Refining of prototype 2

More testing

The list could become quite impressive. When they are satisfied you are not in the process of wanting to take advantage, they will understand you do not want to bamboozle them and you stand a much bigger chance of obtaining the work.

You could also propose to work at cost in exchange for a part of sales profits. You would explain that you are prepared to do the work for just enough to keep body and soul together if they are willing to share a part of the profit. That is tantamount to proposing a no-cure/no-pay deal, but if the product is successful, you could end up making more.

Hope this helps put things into perspective, good luck with prototype2!

Answer 3

Hi

My best advice is to show them how you came to your estimation. Give them an analysis, an outline, or a summary consisting of the things you need to do in order to complete the request.  Of course, you do not need to be detailed but a generalized yet realistic presentation of what you're asked to do should satisfy them.

If they want to commission more work from you, they must like the work you've already done.  I really wish the best for you if this job is worth the undertaking on your part and you really want to do it.  =)