Help! I have my first client

Well, that was quick. I have my first job. A long time colleague from a major broadcast company has approached me, "you know how to do this app stuff, don't you?" Long story short: I've got the go ahead to build a web app. My problem: how to I charge?

1. I don't want to take the Mickey.
2. Transparency
3. I'm a LONG way from being a senior - experience wise.
4. I know I can build what they want.

I will do it through my company - charge a fee to build, a monthly fee for servers (AWS) and a fee to upkeep the code.

So how do I structure this?

Any advice would be very appreciated.

Comments

[Alex Sinclair]

To address the monthly fee part, I discovered AWS DevPay earlier. It seems to let you charge a client directly for their usage of aws with your markup on top. Sounds much easier for agreeing how to charge for aws.

[Jaimie Carter]

Thanks. This is great, I'll have a good look at it. I think they're looking for a turnkey solution, so it'll all have to go through my company. This is very interesting, though. For people you're helping out, it will be perfect.

[Vicente G. Reyes]

I didnt know this! Thanks!!

[Alex Sinclair]

If you wind up looking in to it, I'd love to hear if you did/didn't wind up using it and why!

[Jaimie Carter]

Thanks Neil, as per normal, excellent advice. I'd not thought of looking at it from the viewpoint of what value does it bring them. That gives me the price.
You answered points 1 and 2 with the other points. FYI "Take the Mick" : Take advantage of the situation. I thought I'd used an international euphemism. Clearly, I need to get back on the plane and get out a bit more... Haha. And 2. I have always done well being open with my oncharging of services and i.e. in this case - what AWS will charge my company for your app.
This is old ground in a new skin for me, and it's always good to get advice

[hussein cheayto]

Based on your article, once you learn "closing", you will get an answer for yoir questions.

The more you practice and enhance your closing skill, the more money you will get. No matter how easy, small or tough your project is.

[Jaimie Carter]

Thanks Hussein, it's already sold. All I can do is screw it up by continue trying to sell it (a mistake people make a lot - not being able to recognise when the sale is done, and keeping pushing with the sell) and I'm probably not too concerned with making as much as possible out of this. Perhaps it make more sense, if you're playing a long game, to be fair and realistic. That way clients keep coming back. And that's what makes you your bread and butter....

[Dan Silcox]

Two basic pricing approaches at a really high level are:

1. "Cost Plus" based - so you figure out what it costs you to do this stuff (including your time of course) and then use this to figure out a price that gives you a sensible profit that actually makes your business sustainable and makes it actually worth doing
2. "Perceived Value" based - you work out the value you are adding to your client's life / business and use this as the basis for your price. For example if they are going to use your app to double their revenue this year, that's a lot of benefit!

I am certainly no expert on this stuff, but from your example I'd say maybe something sensible would be using a cost-based approach for the ongoing server costs etc, and a value-based approach for the initial project - and maybe a hybrid for any changes / maintenance etc depending on their scope.

Hope this gives food for thought - this is kind of a TL;DR version of this ConvertKit article convertkit.com/stop-worrying-about... which itself is worth a read :)

[Jaimie Carter]

Thanks Dan. Yeah, I used to make records (yes, the black discs with a hole in the middle) a thousand years ago, and as a producer you'd use a combination of these methods, even back then. I guess what I was wondering is: is there and industry standard costing structure? Seems there isn't, and that's good to know.