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My Budget? - Why Should I Tell You?!

Asking clients for their project budgets is a topic that I often see on design & developer forums. The consultants post that they would like a project budget when working on an estimate but are frustrated when clients are reluctant to provide it. The consultants usually post that they do not understand why this is. Before I became a consultant I was the IT Manager for several years at a non-profit organization. From that experience I can definitely understand a client's reluctance. In fact, I didn't understand why I should disclose my budget with a contractor until I became one myself.

Budget Size

From the client's perspective, there are usually two reasons that they may not want to divulge their budget. The most common reason is the desire to get the best price that they can. They fear that if they lay out how much they are willing to spend, then that is what the project will cost, and often they are right. Instead they are hoping that the contractor will just provide an estimate that is ideally less then what they were willing to spend. This is a basic concept and from the client's perspective it makes perfect sense.

The other reason a client may not want to discuss their budget is because they may not know what a suitable budget for their project really is. The fear is if they show what might be perceived as ignorance on the topic, then the contractor will take advantage of that, again resulting in them being overcharged. So far I haven't made much of a case for discussing a budget! However, that's because I think it is just as important for contractors to understand their clients' concerns as it is for the client to understand ours.

From the contractor's perspective, my goal is to provide a service or product to my client that both meets their needs and is priced at a point that is within their budget. The fact is that some projects can be performed at different levels of budget. However, this does not mean that the final result is the same. The difference is how much time and effort can be invested in producing and polishing that result. The budget is a key component in determining this. Another element that is often overlooked is that this is negotiable. I am more than happy to discuss options that may increase or decrease the cost. The budget just helps me to establish the initial project and what I can include at that cost point. My aim is then to produce the nicest product that I can within that budget. Without a budget I can only guess where to start, and that often results in an estimate that does not meet the needs of the client.

The budget always seems the most difficult to discuss when there is a new client / contractor relationship. Trust has not been established yet for the client, so this is only natural. Once trust has been established it is usually smooth sailing. The vast majority of my work is repeat customers or new clients that have been referred to me by my existing clients. If I were to take advantage of clients budgets, and provide results that were not a value to the client I could hardly expect them to hire me for more projects in the future, let alone expect referrals from that client. A smart contractor realizes that trust and integrity are key to future work and ultimately a successful firm.

Don't be afraid to provide your budget requirements to a firm when asking for an estimate. But at the same time, don't be afraid to ask for options that could reduce the cost. Make sure that you understand what those options are and whether they provide the value you expect at that price point. Then you can decide for yourself that the project features and polish are at a price that is a value to you and your organization.

Posted by Mark at 21:30
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