Becoming Your Own Boss (BYOB, 5.4)

In the first series, Becoming Your Own Boss (BYOB, 1.x) "Introduction, Today's Employment Picture", you learned some of the facts related to the current employment picture and examined some of the choices that were available to you. In the second series, Becoming Your Own Boss (BYOB, 2.x) "Examining Your Situation", you answered some key questions to figure out if starting as an independent contractor was a good idea for you. In the third series, Becoming Your Own Boss (BYOB, 3.x) "Preparing for Business", you examined the numerous topics (from taxes and insurance to your need for equipment and an office) that need to be considered before you take the step to establishing an independent contracting business. In the fourth series, Becoming Your Own Boss (BYOB, 4.x) "Establishing Your Business" you learned the many requirements involved in operating a business from the business name and structure to the business forms you will need once you establish your business.

In this article you learn about the topic of bidding for services plus the companion topic of performing services.

Bidding For Services

There are two methods for pricing your services in bidding: fixed price bids, and hourly rate bids. If the prospective client has little experience with contractors, the requirement will often be for a fixed price bid. If the client has more experience with contractors, there will usually be more flexibility in bidding.

Fixed price bids are very risky to you because task changes are not predictable, but changes do occur in most tasks.

Changes that happen during projects are difficult to identify beforehand, are even more difficult to define in the contract, and are very often the subject of disagreement later. Unless you are very skilled at estimating, do not offer fixed price bids. If the client insists upon a fixed price bid, make certain that it is high enough to cover the almost certain changes. A bid of 25% to 50% over your original estimate might be appropriate to ensure that you do not take a loss on the fixed price contract.

Instead, suggest a contract based on a mutually agreed upon task estimate and an hourly rate. Point out that your goal in executing the contract will be to meet the estimate or, at worst, not exceed it by more than ten percent. Point out that you will immediately notify the client if a problem occurs that will affect the contract cost. Point out that your goal is to provide cost effective service and that you constantly evaluate your performance to ensure that you do.

Performing Services

Always perform in a professional manner.

Always perform in a professional manner.

Always Perform in a Professional Manner.

Deliver on time if at all possible. If it appears that a delay will be probable, notify the client immediately. Discuss ways to alleviate the problem or reduce undesirable effects. Make every effort to deliver according to your estimate. This is not to say however, that you should, in effect, lose money because of changes to the task or mistakes by the client or client staff members.

Notify the client of any changes or unforeseen circumstances that might affect either the delivery date or the contract cost.

If there is a problem that you can clearly identify as yours, but it is probable that it will never become known, simply make every effort to soften or eliminate its effects on the client, but do not attempt to conceal the fact that it is your problem. If it is probable that the problem will eventually become known, consider acknowledging it immediately. Doing so will often stand you in good stead with the client by enhancing your professionalism. As Mark Twain once observed:

Always do right; this will gratify some people and astonish the rest.

If you do not acknowledge it, and it becomes known anyway, you will appear somewhat less professional. If you attempt to conceal it and that becomes known, your reputation will be damaged.

If the problem is the client's, attempt to help the client to solve the problem or reduce its effects.

Do not, under any circumstances, attempt to lay blame on client staff members or others.

If at all possible, decline to comment on blame, unless you are the target. In such instance, defend yourself very carefully. It is often possible to win an argument over blame and lose a contract and, possibly, a client. If the problem will affect the contract cost, discuss this with the client.

Always be punctual for meetings. Take notes. A digital or tape audio recorder is almost always appropriate; a video recorder is often appropriate.

Always ask for permission before recording anything.

Be a good listener. If you have nothing important to say, keep quiet. If you have a pertinent question, choose carefully the time for asking it. If you are asked a question, offer only a thoughtful answer. If you do not have an answer, state that you will research the subject and offer an answer at a later time.

As is mentioned in several places in these articles, keep a log book.

This Is Very Important.

Take notes on who, what, when, where, why, and how. Include notes on the likes and dislikes of the client and important client staff members. Include notes on special circumstances and problems. Keep the log up to date.

Evaluate your performance on a regular basis. If you are not up to par, determine why. If the problem is yours, fix it immediately. If the problem is caused by the client, client staff members, or circumstances beyond your control, discuss it with the client.

And last, but not least, the most important two rules regarding client relations:

Rule Number 1
The client is always correct.

Rule Number 2
Memorize Rule Number 1.

This does not imply that you should never point out, diplomatically of course, items or procedures that could or should be improved. That is part of your responsibility to the client. When the suggestions are ignored or disregarded however, in the words of one who has obviously "been there":

When the client has beaten upon you long enough, give him what he asks for, not what he needs. This is very strong medicine, and it is ordinarily required once only.

On this subject, the final thought must be a reminder that you are a contractor and that, regarding suggestions, you must never forget that the person who approves your invoice for payment is the final authority.

The final article in this series (BYOB, 5.5) addresses the topics of billing for services and a "hopefully never needed" topic of collecting from deadbeats.

To read the rest of the series click here