Tuesday, February 03, 2009

7 rules for quoting

Posted by Duncan Drennan at 12:09 Tags: , ,
Quoting for electronic design is quite an art. You never really know how long something will take or the difficulties that you will face along the way. Experience helps to give you some indication of the effort involved, but a new project is often outside of the experience that you have. A gut feel could lead you astray or to pin point accuracy. A framework for quoting certainly helps...
  1. Always give a quote

    An offer is on the table ensures that you are in the running. Set a time frame for the quote and deliver on your commitment. This the first opportunity you have to demonstrate that you can deliver – make sure that you do. I recently quoted on a project and was shocked that at least three other companies had not bothered to deliver a quote.

  2. Know your worth

    Understand your own value and how that contributes to the project. Undervaluing yourself leads to difficult financial situations and lack of motivation. Overvaluing results in a begrudging client who is unlikely to use you again. Clearly communicate the value that you add.

  3. Quote on fair value, not customer worth

    Big customers may have more financial backing, but should not have to pay a premium for your services. You may want to under–quote a small customer to make sure that you secure the work. Everybody loses when a quote is not fairly valued. Under quoting undermines the project and compromises your ability to deliver a high quality end–product. Over quoting undermines your relationship with the client and damages future opportunities.

  4. Know your strengths and weaknesses

    Understanding yourself will help you to leverage your strengths and compensate for your weaknesses. Quote around your strengths and approach the project in a way that gives you and your client an advantage over your competitors.

  5. Take reasonable risks

    If we only quote for things that are comfortable we limit our ability to grow. Sometimes a project might seem too big, or require skills that we have not yet aquired. Push yourself enough that each project forces you to grow.

  6. Only quote if you can deliver

    If you can't deliver or you are not the best option, then be open and clear about this. Your client will be happy to know that you did not mess them around. Doing work for work sake is a bad strategy.

  7. Be remarkable

    Amplify your strengths and offer something remarkable. Remarkable could be the way you communicate with your client, the quality of your work, or the speed at which you are able to deliver it. It may even be the price (high can also be remarkable). Remarkable beats boring.

I would love you hear what your ideas and "rules" for quoting are – please leave a comment and let me know.

If you have an idea for a product, or a problem that can be solved electronically, then please contact me – I would love the opportunity to give you a quote.

4 comments :

  1. Darren2/04/2009 11:06 am

    Great article Duncan. I like your approach, and can see Seth's influence in there too :)

    Keep up the great work!

    ReplyDelete
  2. Darren2/04/2009 11:19 am

    Oh, no's 1 and 6 are a bit contradictory. I agree with both, but perhaps the key is say upfront if you can't quote, otherwise make sure you do provide one?

    Just my 2c :)

    ReplyDelete
  3. Duncan Drennan2/04/2009 10:22 pm

    Yes, they are contradictory - by intention. I believe that there is a delicate tension between the two which every entrepreneur has to juggle.

    ReplyDelete
  4. Anonymous2/06/2009 3:53 pm

    Great list, Duncan.

    On risk: I'd suggest don't be shy to show the risk, but there is no reason why you must take it on yourself every time. If the risk should be with the client, explain the risk and what the possible consequences may be - but make it clear it is for their account - at least if it should be their problem.

    Then I'd also suggest:

    Set policies.
    This will give your approach to quoting structure. You'll be more consistent and less vulnerable to being influenced by circumstantial factors.

    ReplyDelete

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