Have you experienced broken projects? Perhaps things didn’t go as planned, perhaps a mistake or two, maybe things snowballed and sunk the whole thing?
Estimates are often given by service providers. The estimate represents their best guess on how the project will unfold.
The party receiving the estimate expects it to be at that price or less. Within the time frame or faster.
Market value often determines price. The most volatile price on the restaurant menu may simply list, market price.
The need of the vendor is to sell the product or service and at the same time attain some level of profit margin. Selling in volume may be a strategy, or selling something very unique at a higher price may be a strategy.
Disposable ink pens versus a one-of-a-kind painting. Sell a few hundred thousand pens and you have a business. Sell a single painting and you have a business.
What happens when the project breaks?
The exact project that you planned for seldom happens. The person or organization providing a project quote has considered many factors when formulating price.
Pricing often includes a little fluff or a buffer. When things go really well, profit is realized. When things go really wrong it could mean financial hardship.
The goal then is to make the project as successful as possible. Beyond just checking the box, and making the customer feel good, there should be something left over. A pay day for the business and persons involved.
Projects often break, but do they break within the bounds of the fluff and buffer? Do things pile up, pile on, and strain the success?
The best bet may be not to undersell.
Competitive pricing or market price doesn’t mean what is provided is exactly the same. It means that it is estimated and fits within a frame.
Enter with optimism. Minimize breakages. Celebrate projects that work.
Dennis E. Gilbert is a business consultant, speaker (CSPTM), and culture expert. He is a five-time author and the founder of Appreciative Strategies, LLC. His business focuses on positive human performance improvement solutions through Appreciative Strategies®. Reach him through his website at Dennis-Gilbert.com or by calling +1 646.546.5553.