3

I'm about to start my first consulting gig with my first client.

The things is, I've spent 10+ hours already just scoping the project and estimating how many hours each task takes before even starting to negotiate the contract.

My question is, when he says ok and starts drafting a contract for X hours for all the tasks that I've given estimates for, is that the time for me to say "sounds good, also add $1,000 for the time I spent scoping this thing" or is that not a thing consultants usually charge for?

bigpotato
  • 131
  • 4

6 Answers6

3

In most businesses, the time it takes to write a quote is seen as a loss-leader -- the price you must pay if you want the actual work (which does pay).

So no, you generally do not charge for the time it takes to quote/bid a project.

Scott
  • 17,400
  • 1
  • 37
  • 71
  • I concur with Scott - Profits from prior contracts help carry the expense it takes for you to survey and find your next contract. The greater your experience, the greater your funds will help contribute to future research, sick, holiday, pension and other expenses that still need paying when you are between jobs. – fiprojects Oct 11 '16 at 14:50
3

Generally, projects can either be 'fixed amount' or 'time and materials' where an hourly/daily rate is agreed upon.

If the client seems to prefer a fixed amount, one usually adds the time used estimating to the total cost of the project.

If the project is paid by the hour, one usually does not visibly charge for the up-front estimations, unless the client has asked for estimates and knows they will be charged. Perhaps quote a slightly higher rate to the client.

Never surprise a client with an unexpected charge; even one which might seem insignificant compared to the scope of the project.

morsor
  • 3,887
  • 1
  • 12
  • 21
3

It may be too late for this particular project, but when you figure out your hourly rate, you need to account for your "non-billable time" (i.e. business development - proposals, etc - and other administrative activities that aren't directly billable to clients) and roll that into your hourly rates. So proposal development/scoping projects doesn't get a line item, but the costs are covered in the overall project cost.

Voxwoman
  • 1,622
  • 11
  • 13
2

Generally speaking time you spend on a proposal is the 'cost of sales', i.e. the time and effort you spend on drafting proposals, doing presales meetings etc.

In your case, scoping the project in such level of detail is considered part of the executing of the project. So what you have done is work that I personally would only be doing when the contract was signed. If the customer suddenly says "I changed my mind, it's not going to happen" you did all this work for free.

To summarize: all the work you need to do to sell the project, including a global estimate of costs in your proposal is "cost of sales" and is not invoiced separately. Actually planning and fully scoping the project is part of executing the project, not part of sales, and should be invoiced.

As mentioned above: if you have fixed price projects it doesn't matter anyway because you have agreed on a price for the entire project. If you're on time and material I'd definitely invoice this time once the project starts.

user3244085
  • 1,629
  • 8
  • 16
1

The answers above are pretty much what I'd write. The only thing I did not see addressed is the fact that this is your first client. Taking that fact into account I would work with the client and do your best to come out with a client not having worked for free. See what your client says. Perhaps his expectation of having a fast planner are beyond your capability. If this is the case you'd need to make concessions. On the other hand, if the client is taking you for granted you should take note. As far as the technicality of project management, I believe the above answers do a good job.

user6035379
  • 435
  • 1
  • 4
  • 13
1

I've seen someone considering this time taken to plan the scope of projects, summing it to the cost of planning projects refused by clients and spreading proportionally to the projects of the following year: the cost of little projects is increased by a little, the cost of big projects is increased by a greater amount.

Maybe this is feasible when you have a certain set of clients to work with.

Fil
  • 489
  • 2
  • 10