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>I've had my own software development business for about 3 years, and I've come to the conclusion that I'm ripping myself off. Since I work off-site, I give my clients a flat rate. For example, if I estimate that a job will take me 24 hours to complete, I will charge the client $75.00 x 24 hours. The problem is that these jobs rarely ever conform to the original time estimate. Communication is often very bad on the clients end, since they are either slow in answering my questions or send me incomplete or inaccurate descriptions of what they really want. A 24 hour job could end up not being completed for a month because of these communication issues. I've wasted a lot of time redoing applications, because I did not have the correct information to start with.
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I think your rate is fine. It is not your fault that your clients do not work well with you and you have bad communication channels to them. Whenever you are working for a client, that client should pay for the hours.

>Since I try to foster a good relationship with my clients, I would hate to tell them that I have to charge them more money because they did not communicate their specifications accurately enough or in a timely manner.

Why? This is not your fault... You are looking at it wrong - you are penalizing yourself for your client's problems.

>Given all of this, I'm thinking that my rate is not high enough or I'm not estimating enough time from the beginning.

The latter is very apparent based on the below estimate!!

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>Finally, here is the question: What should I quote this client as far as a price, and how long should I estimate that it will take? I was going to quote approximately $3000.00 for 40 hours worth of work, which includes consulting, development, testing, implementation, and training. However, my partner thinks that I continually keep under quoting the price and under estimating the time for projects such as this. My dilemna is that I don't know if I'm charging too little or too much (I've lost a few prospects). Granted, if I knew exactly what a client wanted before I began programming, I could probably build this within a couple of days. But, that rarely happens. In the past I've lost quite a few prospects, and I'm not really sure if this has to due with sounding too cheap or too expensive. Is it my rate that is off, or do I not estimate enough hours?

You are not giving yourself enough hours!!! Can you really make a complete custom written piece of software with activex controls, documentation, database design, setup, etc in a week? If you can, you are a Superman!!!
40 hours might be enough time for the design...

Our philosophy is to break the project into steps, and do a COMPLETE design phase separately from the actual project. If you can get the client to sign off on 30-40 hours - you can draw up the specs completely, making detailed designs for the database, application, etc. Then the client can review, approve and you can give an exact estimate on product coding, testing, docs, implementation, etc.

Any changes should come with a change order, a calculation of hours, and a cost to the client.


HTH