When you’re setting out to work on a new website, it goes without say that cost is a vital component in the decision-making process. Whether you’re a consultant or company that will be doing work for someone else or you’re a person or company that will be hiring others to help with your project’s lifecycle, cost is always at the top of the list of things to evaluate and understand.
While it may be easy to fall into the trap of thinking that hourly or per-project cost is your go-to method, a bit of planning and forethought into the benefits that can be achieved from each on every project can lead to big savings down the line. Depending on your industry, you may be very used to using one method or the other, but as many Optimum Systems Online clients have learned, switching up your thinking can really make big things happen to the bottom line!
It goes without saying that projects can vary significantly between scope, time, and cost. Optimum Systems Online clients have struggled with this, just as any other company has. Ultimately, we’ve found that per-project costs can be fantastic for both the client and the vendors if there is ample experience involved in the planning process. This type of pricing is generally best performed when the staff and/or company is experienced in the type of project that’s being planned. That said, when experience is utilized, this can be a very beneficial method of costing for both the client and the companies involved.
If you’re considering a per-project pricing structure, an hourly rate will likely still come into play in one form or another. After all, time is money. Per-project pricing can help you either compete or find great competitors that can meet your own ultimate budget. In the long run, if you’re able to build contingencies into the “big picture”, you could see an optimal savings.
Per-project costs can be great for budgeting, for so long as the people involved in settling the cost of the project know exactly what is involved in each and every aspect of the project’s plan. If you have “xyz” budget, and you can’t possibly stray from it, build from there and work down. “This much” if for such and such department and “that much” is for this segment. With proper planning and great experience, you can absolutely achieve fantastic results with a per-project plan.
Breaking down your hourly cost, for many people and companies, may be the stronger choice. It’s something that everybody’s familiar with, and it can seem like the easiest way to budget costs. Clients and vendors alike are likely very well-versed in dealing with hourly breakdowns.
As a business approaching a project (large or small), having a contingency plan in place, especially where money is concerned, is imperative. If you’re able to account for mishaps along the way with an hourly rate, you may be all set. However, it is often very difficult to account for things that may come up if you’ve budgeted for a specific number of hours at a specific rate, particularly if those hours start growing.
One of the most important things to remember about projects is that there are highs and lows. That comes in the form of both morale as well as work flow. If there is a lull in work while you’re waiting for one segment of the project to be handed off to the next person or team, are they on your clock simply because they’re, well, on your clock? If you’re paying an hourly rate, you may inadvertently be paying extra money when no work is being done. On the other hand, if a project completes in less time than expected, you’re bound to save money if you planned your budget properly from the beginning. On the other hand, if a project is executed in an organized fashion by a professional, you can save a great deal because per-project costs often over-estimate the hours it will take, so an efficient hourly-employee will likely come in under budget.
If you’re looking for ways to guide your project in the right direction, contact our team at Optimum Systems Online, and let us lead the way to your success!