How many productive hours you anticipate needing to spend on this project, total.
The minimum rate that you would be comfortable living on, to meet your expenses and savings goals.
The rate you would feel comfortable working at, all things considered.
This is the value you calculate the client could confidently receive upon delivery of a successful project. During the initial call, it's worth trying to gather a few key pieces of information that will help you calculate this. It will vary from business to business, but some examples of useful info that can go into the Expected Client ROI include:
You are looking to make some key business outcomes more tangible in order to assist with the value-based pricing effort. For example:
For our value-based bids, grounding this number in some tangible, expected business outcomes will be key.
This factor relates to how urgently the client needs this project to be achieved. Are they rushing it through? Is there a major deadline coming up quickly? Or is it a lower-priority task—something that could be pushed off for later?
In terms of negotiating a bid, the higher the urgency of the project need, typically, the higher the price point you can expect for delivering well.
This refers to the stress level you will be onboarding with this project. It will be a subjective rating, combining multiple factors, but simply ask yourself—how stressed will I be by taking on this particular project? Perhaps it is a high-stakes client, and that will contribute as a high stressor. Perhaps you have other things going on and this will contribute significantly to tipping your natural calm.
This is an added benefit factor for you, as a solo or freelance business. The question relates to—how well would this project go into my portfolio? Beware of big name clients that dangle this as a 'major' factor for accepting a low bid—but it is a factor. Something that would look good in your portfolio will change from business to business, but it could include;
This is another subjective 'benefit' which summarizes your general sense of the client and the project, as a whole. Is it something you're likely to enjoy working on? Do you feel comfortable with the client based on first interactions? Is there any odd tension or sources for concern? The good fit factor is the human factor of any project—and it should count for something.
Any additional costs that you expect to arise directly from this projects—e.g. software, research spend, travel—can be added here. This value will only affect your 'Minimum Viable Bid' and 'Ideal Rate Bid'—it will not influence value-based bids, since these are derived based on value brought to the client and it's your responsibility to absorb any related costs in delivering that value.
This gives the output of your 3 Value-Based Bid tiers.
This is derived from the [(minimum hourly rate x expected hours) x 1.05] + Project costs. The added 5% gives you some wiggle room for unexpected costs and added workloads.
This is a bar chart version of the statistics above.
The Ideal Rate Bid is derived with the same formula as the Minimum Viable Bid, only using the 'Ideal Hourly Rate' as the variable input instead of Minimum Hourly Rate.
This chart shows the values that have been attributed to the various 'Additional Factors' listed above.