Previously I wrote about 3 questions to ask yourself before you write an estimate.
There are bigger questions to ask yourself first though.
Primarily, should you even be sending an estimate to that client?
Do you have enough information to send an estimate to your client?
Do you want to build a long lasting business or a flash in the pan that squeezes out as much money as possible from clients?
If you’re working to build a long term business with happy clients (which I think you should be doing) then before you even start to write an estimate you have 2 questions to ask yourself.
If the answer to either of these two questions is ‘no’ then you really shouldn’t be sending the estimate at all.
At the very least you don’t yet understand what the client needs and what the benefits are of that need being fulfilled, so you don’t know enough to even send an accurate estimate.
In the worst case, you simply don’t provide any value for your client.
Last year I had a potential client that wanted to build a set of sites that catered to restaurants.
After a bunch of emails and one longish phone call, I really couldn’t see how the site was going to make money.
The business model just didn’t seem to be there at all. The payment fees from a service like Stripe was going to eat all the profit.
So I told the client that I didn’t see how spending 15 - 20k was a good idea since I didn’t see how they’d make money. Then I explained my reasoning around how as their costs increased they actually made less money while their clients made more.
I was the only business that told them their idea wouldn’t work. Two other agencies just sent out the estimate. When the potential client went back to the agencies with my reasoning, they admitted to never even thinking about if it was a ‘good’ business idea.
They were solely focused on the 15 - 20k payday for their agency.
If you followed my actions above, you would have potentially lost a $20k sale.
That doesn’t seem like an upside to me at all.
When that client has their next idea, who are they going to come to?
They’re going to come to you first.
Who are they going to send their friends to?
Since talking those potential clients out of a $20k spend they’ve sent me 3 other clients.
They’ve hired me to ‘consult’ on the business side of 2 other ideas where my job was to question all their assumptions.
Through this, I’ve made $20k by turning down $20k, and they keep sending people to contact me.
Before you write an estimate ask these 2 questions:
If you don’t have an answer, go back to the client and talk to them till you do have an answer.
If the answer is ‘no’ because the business model just doesn’t work as you see it, tell them that.
Start building a long term viable business with clients that love you.
Start building it today.