Ask HN: Are big budget projects losing you money?
2 comments
To do the small projects profitably you have to eliminate the sales/requirements gathering/etc overhead.
For instance, if you charge $100 an hour for the time of the principal and it takes 3 days of meetings to decide what to do you are down $2400 right off. Never mind handoff, training, etc. Yet you have to get this stuff right.
You need to have a highly disciplined process in terms of project management, programming and try to learn as little as possible extraneous information to getting the job done. (Don't try a new language) However you can't waste time on the process.
The real difficulty is that 1-in-5 of those $3000 projects will metastasize into a $30,000 project that you have to eat the costs for. I worked for a guy who was a brilliant salesperson and he could price 80% of the deals right, but 20% of the deals would go massively over... and that's why I don't work for him anymore.
For instance, if you charge $100 an hour for the time of the principal and it takes 3 days of meetings to decide what to do you are down $2400 right off. Never mind handoff, training, etc. Yet you have to get this stuff right.
You need to have a highly disciplined process in terms of project management, programming and try to learn as little as possible extraneous information to getting the job done. (Don't try a new language) However you can't waste time on the process.
The real difficulty is that 1-in-5 of those $3000 projects will metastasize into a $30,000 project that you have to eat the costs for. I worked for a guy who was a brilliant salesperson and he could price 80% of the deals right, but 20% of the deals would go massively over... and that's why I don't work for him anymore.
There are too many bad clients that have $30k ideas and only $5k available. They'll never be satisfied, are super cost conscious, will want a micro-accounting of all time spent, and simply aren't worth it.
While there are a few good clients in that price range that actually know what they're doing, they're far overwhelmed by people with unrealistic expectations.
While there are a few good clients in that price range that actually know what they're doing, they're far overwhelmed by people with unrealistic expectations.
That’s a statement I hear every week from freelancers who pay me for freelance leads. I’m not sure why $30,000 is the magical number but apparently it is.
Leads below this magical threshold get rejected by people who are self-labeled as “desperate for work” and sometimes even in a dry spell, but how can a $5,000-$10,000 project really be that unprofitable for one-person?
Why do most freelancers even prefer big budgets anyway? Big budgets mean big projects - which are hard to scope out and actually finish. When you finally deliver them, there’s always more revisions. They drag on. They kill profitability.
Of course, this can also happen with small projects at a smaller scale… which is my point.
If you’re not able to make a $5,000 project profitable, you’re less likely to make a larger, more complicated project profitable - right?
When I examine my past 5-figure freelance projects, I find most of the budget went to things like: meetings, proposals, presentations, revisions, emailing, and following up on things.
I can’t help but wonder what would happen if I cut these things out and replaced them with nothing. Would the client really be worse off?
I’d be able to focus on things that actually mattered instead of fluff and I’d charge them less.
So what do you think?
• Have you ever felt like big budget projects could be losing you money?
• What would you do if you had to make a $3k project profitable instead? What would you cut out?
• Have you ever hired a freelancer like you for $30k+ project to help your own business? Why not? If it’s truly a great investment why aren’t you paying for it?
(Note: While I do agree that some highly-specialized consultants shouldn’t work for less than $X0,000 — I don’t think that’s the case for 90% of people.)