The Perfect Estimate

The Perfect Estimate

15/09/2015

You have received request for quote – check how to create the perfect estimate and make sure you won’t underestimate the time needed to deliver services.

We’ve all been there: A client has an interesting job for us – and he wants us to offer him an estimate. This is great and makes us happy (even though job offers tend to come at the wrong time, by which I mean all at the same time – but that’s another story). Well. A client wants to give us a job. Of course we want to do that job. Of course at the best price possible. But we know, too, that our esteemed client probably has offered some of our competitors the same job. And they want to get the job as well. Of course at the best price possible. What now? Your work might be perfect – but your estimate will determine if you’ll get the job. And it is not as easy as you’d think to craft a good estimate. There are many factors to be taken into account and many questions to be asked.

Form
Let’s start with the easiest question: The formal requirements for an estimate. Basically, an estimate is an invoice. Or rather, a potential invoice. What applies to the perfect invoice, then, applies to the perfect estimate: Both need a professional header with your firm’s name and your address as well as name(s) and address of the addressee. Also helpful is a sequential identification number and the date the estimate has been offered. And please don’t forget a friendly greeting and some appreciative words to show manners and respect. So. That was the easy part. What follows now is the heart of the estimate: A detailed list of the services and/or products offered and their estimated cost. Sounds easy, doesn’t it? It isn’t. The problems usually start with estimating the services the job requires.

The service
Because first and foremost you’ll have to break down the client’s job description into calculable units. These units might be hours, words or photographs – whatever your skill is. Come on, you might say, that can’t be that hard. Ok. Imagine you’re a translator. Your ideal client will phrase his job like this: ‘I need 500 words translated from our website, targeted at millennials – and please find attached the original text.’ This estimate is not very hard to do, I’ll grant you that. But real clients usually offer their jobs like this: ‘Hi! We need our website translated. How much does that cost? Sincerely, Your Real Client.’ Well, you might think, how the hell should I know? Because really, how could you know how many words actually are on that website? Either you now ask the client for a more detailed job description – which I’d recommend. Or, for some obscure reason, you don’t want to shy the client away and start counting the words yourself. On every single page of that website. Not totally yourself, obviously, there is an app or an add-on or something for that nowadays. But still, it takes some time. Time that might or might not be reimbursed, depending on how your estimate will be received. So, please: Whenever it is possible, go and ask the client for detailed job descriptions. If that is not possible, I’d strongly recommend working at an hourly rate. This brings us to the next point: Time management.

Time Management
Time is money. If you’re working at an hourly rate, you have to be very clear about how many hours you’re offering the client. A very dear friend of mine once gave me very good advice: Always add 20% to your estimated offer. Gosh, I was scandalized! This is cheating, I cried indignantly. I’d never do that! Oh how young and stupid I was. Because after years and years of work I have come to realize how right she was: Everything takes longer than you think. Everything. Always. Therefore it is in the very interest of your client to be realistic about estimating how much time a job needs.
This is true also for general time management. I’d rather offer cautious dates of delivery – worst case will be an early delivery. Too early! Just imagine how that will impress your clients. Or you can use the extra-time for quality control – not a bad thing if you ask a client, believe me. Even though most clients want their jobs to be done asap, right now if not yesterday: Good clients appreciate quality and would rather wait a certain amount of time. And if I realize that I totally, absolutely don’t have time to do a job I’ve been asked to offer, I’ll be honest and let one of my colleagues have it. Most clients will appreciate that, too. And who knows – maybe some other time you’ll be the one receiving a job one of your colleagues had to decline.

Pricing
And now, after you have an estimate on the efforts the job requires, let’s get to the point. The Grande Finale of any estimate: the pricing. If you aren’t experienced enough to set your own price: do your research. Ask around, get some estimates yourself, check out professional associations and read their statistics. No-one likes to talk about their pricing – but you’ll find at least a range that applies to you. Don’t forget to adapt your pricing to your country. The Swiss, for example, have higher rates that other European countries; but then the Swiss cost of living is much, much higher than in most other countries. Take your taxes into account, as well as your expenses for rent, facilities and equipment, and don’t forget your financial risk as a freelancer. With all due respect for freedom and liberty – your client has freed himself from financial obligations to you as well, including such things as long-term job-security. These obligations are all yours now. Think about that and take it into account.

Therefore, don’t go too low with your pricing. Don’t sell your talents for nothing – quality and professionality have to be worth something. Most of us underestimate our clientele: they usually don’t want dumped goods. The price might be a crucial factor, but it is not everything.
Nevertheless, you should not over-estimate yourself of course. Find a level of prices suitable for your skills and your experience. And don’t forget to adjust your pricing constantly. Because the more experience you gain, the higher the quality of your work – you and your clients should benefit from that.

And last but not least: Always craft your estimate with great care. Only then it will be perfect.

Sincerely,

Moneypenny


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