Project minimums

Or how I stopped wasting two hours to build a proposal for a project that would let me bill $600

When I started freelancing I used to talk to anyone who was interested in talking with me about a project. That usually included me creating a proposal for them too.

Since I was timid, scared, and unsure of myself I’d triple guess everything in the proposal. That’s like second guessing but with a whole additional layer of insecurity added on top.

That meant that even a simple proposal would be an emotional experience for me and would take at least two hours of work.

So lets see:

  • 1 hour of talking with the potential client
  • 2 hours of writing a proposal
  • 1 hour for negotiating and signing a contract (including the oh so fun “print, sign, scan” dance)

So I’m looking at 4 hours of work to start a project. Not a big deal right?

Except for when the project you’re bidding on is only about six hours of work.

You’re heard me right.

I’ve taken 3-4 hours to chat and bid on projects that would make me $600.

This happened only a few times before I wised up.

Fixin’ the Problem

I figured there were two approaches to fixing this business problem:

  1. Become faster at creating proposals
  2. Adopt a project minimum

Becoming faster at proposals sounded like a good idea at first.

It wasn’t.

Creating a proposal has a lower limit. You can only get so fast. Building trust when you first talk to a client takes time. You can’t rush it. Thinking about their project takes time. Rushing that usually means I’ll miss something in the proposal. And missing something in a proposal is a good way of missing a few 0s on your estimate.

The Policy

Instead I adopted a project minimum policy. This was scary because I used to always have a small project or two running.

At first I set my project minimum to $1,000. That was about 10 hours at my rate then ($100/hr). I also required that to be at least per month. That way a $1,000 project wouldn’t get spread out over 6 months.

(Yes I had someone ask for that. Those “we only want 1-2 hours per month” projects are productivity killers)

This worked great. My clients understood my need to work on (relatively) larger projects. I lost a few projects where they only needed a few hours and didn’t have the budget to go up to $1,000. But that’s business, you can’t help everyone.

The best thing about this policy was that I started getting larger project and less clients. That meant less overhead, less sales and marketing, and an overall efficiency improvement.

(This was also the start of my discovery about how great long-term contracts can be for a solo freelancer)

Since then I’ve toyed with the idea of raising my project minimum. Maybe to something like $2,500 or so. I haven’t though because over the past few years I’ve been getting clients with large enough projects that they were no where near my minimum.

If you don’t have project minimums, I highly recommend that you consider putting them in place. You don’t have to do any paperwork. Just tell new clients “I have a policy that prohibits projects smaller than $X”. You can always bend the policy in exceptional circumstances, though you probably won’t need to.

Eric Davis

P.S. Another good option is to use a different unit for your rates other than hours. A per-day rate with a 2-day minimum could accomplish the same thing.