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Reducing Consulting Fees?

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Reducing Consulting Fees?

adamblevins
I recently started my own small business (still have, but hoping to break out of, the day job).

Business is trickling in (IT Support), but not the business I would prefer (Project Management).

Recently I was given a Project Management lead. The project involves designing a complex e-commerce website and some related data migration. To cut costs development will be outsourced to a foreign company.

I gave my initial proposal and was told my ideas had merit and offered value, but were "out of the budget", and that "if I devised a plan more suited to small business, to let her know".

I built the proposal based on past experience (8 years of similar corporate work). Some items I felt would be the same would be communication time, documenting/resolving development issues, task monitoring, etc..

Also, the Lead Developer came in at a price $1000.00 higher than me, and was accepted.

I am wondering:

1. What are your opinions on reducing fees to land a contract?

2. My gut tells me this could be a fiasco due to budget restrictions and potential communication/accountability issues with a foreign company.

3. The Sponsor's apparent feelings toward PM make me wonder how processes will be allowed to function, and if I will be hamstrung...

Have you been down this road? What are your thoughts?

AB
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    Ed Woychowsky

    There is a physiological angle here that you?re not considering. Several years ago I knew a consultant that wasn?t getting very much business, but instead of reducing her rates she increased them. Suddenly companies that turned her down in the past were lining up to give her contracts. It turns out that the companies felt that for X dollars she was average, but for Y dollars she had to be good.

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    0 Votes
    Ed Woychowsky

    There is a physiological angle here that you?re not considering. Several years ago I knew a consultant that wasn?t getting very much business, but instead of reducing her rates she increased them. Suddenly companies that turned her down in the past were lining up to give her contracts. It turns out that the companies felt that for X dollars she was average, but for Y dollars she had to be good.