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I work as a part timer freelancer at oDesk. At oDesk client budget is already written on job posts. So, many times there are chances that after a successful job with client, he/she offer me an another job without giving a budget. Since, I am not very good in determining job bid in such cases, I find it difficult to make a good bid.

So, I am wondering should I ask the client for a rough budget or I should try to bid myself? What's happen in such cases and whose responsibility is to give first bid?

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up vote 6 down vote accepted

I always cringe a bit when I hear a freelancer ask a perspective client "What's your budget?" Isn't that the same as asking "How much can I get away with charging you?" Or "Can I charge you more than I normally would without you realizing it?" For me, there is absolutely no reason I need to know the client's budget. I need to know the breadth, scope, and complexity of the project, that's all. It's for me to determine if it's a $500 or $50,000 job, then they can determine if they wish to pay for it.

I rarely get a budget from any any client (but I don't use online services either). If I do get a budget it is after my quote in an effort to possibly lower my costs to meet a lower budget (or as a negotiating tactic on their end).

I price all work according to what I need to earn. Isn't that how everyone should be pricing? I've calculated my hourly rate, then bear in mind current market rate trends, and ensure I'm never at a loss for any project. Is there a possibility that I could charge another 20% and retain the work, maybe. But is it worth finding out? Most often not. As long as I'm earning what I've determined I want to earn why chase after unicorns and rainbows? You know, a bird in the hand is worth two in the bush and all that.

If I calculate, based on the project scope, I need to charge $5000 to complete it. Then that's what I need to earn and that's what I quote. It makes no difference if the client has an $8000 budget. I price based on my rates, not what the client has in their pockets.

Imagine this... you go into a store and want to buy a stick of gum. You walk up to the cashier and she looks at you, and then says "Well, we would have priced that gum at $1, but since you have $20 in your pocket, how about we charge you $19.99 for it?" -- This is what you are trying to do by pricing based on the client budget. It's ethically questionable and ultimately will do you more harm with clients than good.

Determine your rates and then calculate project costs based on that. The client's budget should make no difference to you at all. Unless they express their budget is lower than your quote/bid and then it's up to you to determine if you wish to lower your pricing to meet a lower budget.

Knowing the budget only really makes sense when their are physical material costs. For example, remodeling your kitchen. A budget is needed then to purchase appliances, type of lumber, type of tile, etc. and know what is available to spend. But in the digital realm, where any material costs are pretty much known up front (if there are any at all), knowing a budget is pointless.

The notion that anyone creating digital content needs to know a budget up front is a myth. We all know what web hosting costs, we all know what domain registration costs, we all know what that third party scripting package costs. These can all easily be factored into any bid/quote. Pretending that a client's budget does anything other than alter how much one thinks they can change is bogus. All you need is a thorough and detailed description of project scope to calculate pricing. Beyond that, it's a matter of negotiation, not budget. If you price a project at $100k and the client states they have a $10k budget... it's negotiation as to what you'll not do or the client will not require to reduce pricing.

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Hmm. Great answer at a time where all answers were not answering my question properly and I was planning to delete the question. It was not what I wanted to hear. but you are right. I got my answer. I will definitely follow your advice in future. – user702 Feb 1 '14 at 15:43
99% of the time if you are searching for services and go around telling people you have $1000 to spend on X. Guess how much X costs most places? Yup $1000 or close to it. Which place do you end up buying from? The place that told you X only costs $350 and that's what they would charge. Honesty goes a LONG way with clients. Glad I could help! – SOIA Feb 1 '14 at 15:49
That's real truth. But in mostly cases you won't end up find people with $350 as budget. – user702 Feb 1 '14 at 15:54
Yeah, that's just an example. I used to try and chase budgets and I found it not only stressful and exhausting, but I get way more work when I determine what I want to earn and simply provide that pricing rather than asking for budgets. I know my rates are higher than many in my direct field (sometimes considerably higher), but I still get work. – SOIA Feb 1 '14 at 15:55
Nope. Your rate is your rate. You are free to set that rate wherever you want. If you feel you are worth more, then it's perfectly fine to charge a higher rate. In fact, if you have too much work to handle, it's often wise to raise your rates to deter some of the smaller clients. If you find, at a higher rate, you aren't getting enough work, then you may be priced too high. – SOIA Feb 1 '14 at 16:02

When client does not offer budget, he either wants to see if you can do it cheaper that he's ready to pay or he simply does not know the costs.

So you can do these things.

  1. Analyze the work, count how many work hours it will take, then multiply work hours with your hourly rate, and you will get your price

  2. When you are sure how many days/weeks it will take to finish job, and you know your desired weekly earning, you can propose the price by counting numOfweeksToImplementJob x weeeklyCompansation

  3. Ask the client how much is he ready to spend to see if you can do it for his money. This should be the last resort since working this way, you don't know what your price is.

Of course you can always combine points 1 and 2. If the sum on point 1 is too large, you can decrese it as long as it's larger than the sum in the point 2.

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Suppose a case: A client invited me for a job, explain me job description and asked me for a budget. I then asked him how much he is willing to pay. He then reply I have explained you the job and now tell me how much is your budget. And what should I do in such cases. Insist for a budget from his side or give some budget from my side? What others do in such cases? – user702 Jan 29 '14 at 17:49
Actually, I am asking this because from my experience fixed price jobs pays much higher than hourly rates. So, I generally try to make more profitable bid based on client budget – user702 Jan 29 '14 at 17:51
@VarunAgw You misunderstood me. Give him hourly price. But calculate hourly price yourHourlyPrice x workHoursNeededToFinihsTheProject – Peter MV Jan 29 '14 at 17:53
I mainly do fixed price job. So, giving hourly rate on fixed price job doesn't make sense. Still, let suppose my hourly rate is $1000 and job will take 5 hours. So, for hourly job budget will $5000. But from my experience, I found that some client have a fixed of budget of $5000 while some may have even high as $8000. So, I want to get $5000 from first guy and $8000 from second guy. But, if I gave a budget from my mind without idea of how much they are willing to pay, I will end up earning $500 from both for same job. i.e. a loss of $3000 from second guy. – user702 Jan 29 '14 at 18:04
That's why I want to know what's in his mind. – user702 Jan 29 '14 at 18:05

Even if your client suggests a budget, you still need to make the kind of estimate that others have suggested. Some clients have no idea what it will take to do a project and some do but will try to get a low ball price from you. You need to be aware, before you sign something, of what you think it will actually cost you in hours to do his job. Some jobs (and some clients!) are not worth taking.

Estimating is something you get better at with practice. Estimate every job even if you been given a budget. Make notes about where the unknowns are and later, where you took longer than you expected and by how much, to finish that part. Keep those notes and review them when you are looking at the next job.

Secondly, limit your risks by estimating the job in parts. Propose a partial payment when you finish writing the specs, for instance. The next part may be due on demonstration of a working skeleton; and the final payment due on delivery of a content-complete system. Estimating and billing in stages may also give you some room to recover on the next stage some of the short fall on the previous one.

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+1, particularly for your technique for estimating the job in parts. – David Feb 4 '14 at 23:37

As freelancers, I believe that we need to define our own income goals and at the same time keep it in line with our target to provide the most cost-efficient solutions to our clients.

If the client is unsure about how much to pay, create a defined proposal - with a breakdown of all the work costs. If they have a pre-determined budget for project, compare it with your usual earnings for projects of the same kind and see how you can come up with a compromise.

Suppose the client presents us with a smaller budget as opposed to how we usually charge, bargaining with them may be a plausible option. Discuss the client's budget and come up with a plan to execute the project without compromising the quality. Talk to them about how their limited budget may affect the number of output to be delivered.

I understand that a lot of us are working so hard to deliver an excellent quality of solutions. Do not compromise it over a small budget.

Also, do not easily agree to a very low budget. It might hurt the market without you knowing it.

The previous answers were on point here, too. Think about how you could work on the project. The hours you'll most likely spent completing it, together with the amount of research work you'll have to put in and present them to your client. The costs you will show them should be concretely backed up by justified means of delivering the output.

If they insist on giving you a very low price, it's your call to agree on completing just part of it - what you deem is appropriate for the amount they will pay you. Offering clients a markdown on your service charges could also help you establish a trusted working relationship with them.

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