Publication Date: 1/26/2009 9:50:08 AM
One of the questions on my new client questionnaire is "What is your budget for this project?" Sometimes buyers are uncomfortable sharing their budget amount. Usually they are concerned that the price quoted by the vendor will be inflated to fit their budget, but there might be other reasons (like they honestly don't know yet.)
I won't say that price inflation doesn't happen. But there are legitimate reasons why you should disclose your budget amount to the vendor:
Are you a fit for them? It allows the vendor to decide if you might be a good fit for their services. Some vendors only take projects of a certain size. And the truth is that every vendor will have a different price for your custom software project, because pricing is determined by a variety of factors, most unique to the vendor. No sense wasting your time and theirs if you aren't a match.
Are your budget expectations realistic? Since custom software development isn't your area of expertise, it isn't surprising that so many customers are unfamiliar with software pricing. Craigslist is littered with buyers describing projects like an Amazon.com clone for < $500. Discussing your budget with the vendor can help both of you to know if the ROI for your project is worth it.
Customization to your needs. Often a vendor can tailor the solution to your budget. For example, they might say: I can give you shopping cart functionality for that price, but product reviews would fall outside of the budget.
Okay, but what about price inflation? Here are some thoughts:
Context is helpful. Some customers have a fixed budget, and would love to add more features if they can be included. Other customer would prefer to pay less for the minimum software requirements. Don't just quote the vendor a price - tell them about your other constraints and objectives. A good vendor understands that all businesses have different needs and objectives and will respond accordingly.
Provide a range. Why not provide a budget range instead of just a single number? This tells the vendor what your upper limit might be, but also shows them that you'll be happier if the quote is lower.
Ask for options. Suggest to the vendor that their quote should include both a bare-bones, minimum feature option and a more full-featured alternative. That will give you some choices to consider, and will help you to answer the question "how important is it to me that the software allows the users to change the color of every form of the application?"
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Avonelle is an incredibly talented software developer. She works fast, is economical, and offers great insights into the project at hand. She is also not afraid to speak up when she has concerns about a decision or approach. We’ve utilized her talents on many of our software development projects over the years.
Carrie Rocha, Chief Operating Officer @ HousingLink
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