Good afternoon, Rodinhooders.
I’m in need of some advice from fellow Rodinhooders on very critical aspect of our business.
We’re running a web design and development company in Surat, Gujarat. We’re a team of 10 people. So far, we’ve good client base, ranging from small business to some big companies. Majority of our existing clients are from outside India.
There are different type of clients, we end up working at the end of the day.
1) New Client – We finalize requirements, budget and time-frame for his work and our developers are engaged for particular period of time till project gets complete.
2) Regular Client
- Type A — He comes up with requirements (new work, maintenance, enhancement) regularly, we schedule the work immediately. Sometime we work on emergency tasks in late night. We’ve fixed hourly rate. We maintain worksheet and send it to him after a month end. On and average, our developer work half of the month for him.
- Type B — He comes up with requirements (new work, maintenance, enhancement) once every 2 months, ask for estimation in hours, once approved, we schedule the work based on developer’s availability. We’ve fixed hourly rate. On and average, our developer work 10 days every 2 months for him.
- Type C — He comes up with requirements (new work, maintenance, enhancement) twice / thrice per month or every 2 months, ask for estimation in hours, bargain sometime and once approved, we schedule the work based on developer’s availability. On and average, our developer work 4 / 5 days per month for him.
- Type D — He comes up with requirements (new work, maintenance, enhancement) twice / thrice per month, we schedule the work based on developer’s availability. We’ve fixed hourly rate. We maintain worksheet and send it to him after a month end. On and average, our developer work 1 / 2 days per month for him.
These regular clients are providing us work since long time. But as you see, Type C and Type D are hardly contributing to our overall business revenue and normally we end up taking extra pressure to schedule and deliver the work. Sometime one developer need to work on 2 or 3 projects in a day.
All these clients are paying us by different hourly rate. We need to make some strong decisions soon to make sure we only deal with good clients in term of revenue generation.
1) Type A client is good in term of providing continuous work, but developer works for half month and that lead us to schedule some another work for developer for rest of the time. Should I ask this client to hire dedicated developer and pay us fix amount per month irrespective of work? By this agreement, we might end up doing less / more work per month than the amount we’re getting. But I don’t know, if client will agree with it or not as his work is not engaging developer for whole month. How do I handle this? Is it fine to increase per hour rate?
2) How frequently we should be revising per hour rate with regular clients and how much? Do I need to make agreement with them to revise rate every year or every 6 months?
3) What should be the decision making criteria to finalize per hour rate for different regular clients?
3) Should we stop working for Type C and Type D clients?
4) Because of work from these regular clients and having a small team, sometime work of new clients get affected. How to deal with it?
Thank You
Nilesh Gamit, nilesh@lamp-technologies.com
Updates: Nov 24, 2014
I found nice article on calculating per hour rate. Seems good enough to start with. How to Calculate Hourly Freelance Rates for Web Design, Development Work