Heidi [00:00:00]:
If you've ever bid a freelance project at a flat rate and felt like it took way longer than you anticipated and ultimately you didn't make quite as much money as you should have for the time you spent, Spoiler alert. You are not alone. There are a lot of reasons why freelance projects go awry and no matter how experienced of a freelancer you are, it can happen to anyone. Connie Bourgeois is a very experienced freelancer. In fact, she's not even a freelancer anymore. She owns an entire fashion design agency. She has 6 full time employees, and she works with a ton of clients. She's been doing this for years, yet she still has projects that don't always go as planned and financially don't pan out as well as they should.
Heidi [00:00:41]:
So Connie and I chatted through multiple ways she can diagnose where and why this is happening and how to solve it, from making sure her prices are high enough to ensuring that she's doing proper discovery with her prospects and clients. If you are doing project based pricing or want to, this conversation is a must listen. Let's get to it.
Connie B [00:00:59]:
Okay. Yeah. So, you know, part of our business is the service part where we charge, either by package or an hour hourly rate just depends on the project. But the other part is that we do manage the production, and that means we are essentially the manufacturer for our clients, so they pay us for their goods. We import them, you know, we handle all of the correspondence directly with the factory. They don't ever talk to the factory, and then we, you know, we bill them for the product with our markup. So where where I get kinda caught up is just balancing that markup in a way that feels fair to both, like, what we're doing for the customer, making sure that, like, we're covering our costs, and then also balancing what I'm charging them on the service side. So they pay us for development first, and then they pay us for manufacturing.
Connie B [00:02:05]:
K. So it's kind of like 2 completely separate things. But oftentimes, when we get to to the end of development, sometimes we've gone over scope or, you know, the the the initial factory that we were using internally, I wasn't super happy with, like, the results, so then we switched to another factory and it kinda ends up taking more time Mhmm. Than I had billed the client for. And a lot of times, I just eat that because I I see us as, you know, the expert and we are the manufacturer. So if there's if something doesn't go right throughout development, through no fault of the clients, I don't want them to have to, you know, pay for our factory sending us poor quality samples because they rushed them, because they were behind, or whatever the case is. Okay. So kinda I guess the problem that I'm trying to solve is figuring out a way to recoup those costs without overcharging for the product on the back end.
Connie B [00:03:13]:
And I'm just not sure if it's a process change that we need to address. I don't know. I just thought I'd run it by you and see what
Heidi [00:03:23]:
Yeah.
Connie B [00:03:23]:
Thoughts you had.
Heidi [00:03:25]:
How let's say you do 10 projects of this caliber. How many creep outside the original scope, and how many do you feel like work really well financially for your you and your team?
Connie B [00:03:37]:
I would say probably, like, 3 end up being, oh, that took way more time than I thought it would. Okay. So about 30%. Yeah.
Heidi [00:03:47]:
Okay. How often do you get kickback or hear no because of your prices? On, I guess and maybe it's on the development portion and on the manufacturing portion, if you wanna look at those separately.
Connie B [00:04:02]:
On the development side, it's hard to say because usually if they don't like our prices, I just never hear from them again.
Heidi [00:04:09]:
Okay. So that would be cool. That would could be considered a no?
Connie B [00:04:13]:
Yeah. Yeah. I would say, like, probably 50%. Okay. Like, 50% of the proposals I send out
Heidi [00:04:21]:
Don't go anywhere?
Connie B [00:04:22]:
Yeah. Don't go anywhere.
Heidi [00:04:23]:
Okay. And the 50% that do go somewhere, do they have any qualms with pricing or is it just like an easy yes?
Connie B [00:04:33]:
I would say about half of them try to haggle on the price. So 50% of the ones that actually move forward.
Heidi [00:04:42]:
Okay. Mhmm. So of the total increase in proposals that or increase you get, the proposal doesn't have 25% or, like, an easy s. The price is a non issue. 25% haggle, 50% leave. Okay. Because my first thought is always is there if you're getting, like, mostly yeses, you need to raise your prices. Mhmm.
Heidi [00:05:03]:
You should be turning people away. Yeah. Right? Mhmm. So I'm not sure. So so without going into too much detail, arguably, your prices could be higher and and there could be a different way you present them or pitch them or position it on value or something like your sales process. Sure. So I would think about something along those lines. Like, there's a freelancer who I I just worked with her inside Fast Track, our new hands on program, and she raised her she was she was doing 999 for a tech pack, and she was getting a 100% yes.
Heidi [00:05:42]:
And I was like, the price needs to be higher. Yeah. She bumped it to 12.99. She got all yeses. She bumped it to 3299. And she was, like, terrified. I was like, you should you should be losing people. Otherwise, you need to keep bumping it, and she has a really good sales process.
Heidi [00:05:56]:
Like, when she gets on the discovery call, she shares her screen, and she shows them the whole tech pack and, like, it's not a complicated garment, but she just shows them what they're gonna get and especially they're small startups. They don't quite understand like what am I actually getting? What's this spreadsheet and drawings? Right? Right. So perhaps there's things again, I don't know your sales process. In your sales process that could, like, make the price make more sense to the customer. Sure. Yeah. To look at and think about. Alternatively, I mean, your numbers on a high level feel healthy to me.
Heidi [00:06:34]:
Okay. Alternatively, it could be yeah. I'm just trying to think about, like, your internal process and how you manage the project a little bit better so that it doesn't creep. Yeah. Yeah. I'm
Connie B [00:06:50]:
trying to that's what I'm trying to figure out as well. Like, I've we've had a couple customers recently where and I did change I did change our contract. I used to do, like, a flat rate. K. And then I changed it to flat rate up to x hours. And if it goes over x hours, then we start charging hourly. And that has helped because then I have at least a fallback plan. Typically, we go the project ends up going over scope because they have too many complexities of they want small units, they will have really specific fabric requirements that take a long time to source because we can't make the fabric because their units are too small.
Connie B [00:07:33]:
So it's like, okay, we spent like 40 hours searching the globe for this fabric that's UPF but also not synthetic. You know, it's like all these things that are really difficult to, like, find in a fabric. So that often is one of the things that causes us to go over scope. Or, they don't want to produce in China, so we have to, like, tap into other areas that aren't as good at communicating and aren't as fast at turning things, and and so forth. Or they they start out the project saying, oh, I want this blazer. It's really simple. It looks like this. And then 2 weeks later, you know, I kind of changed my design.
Connie B [00:08:16]:
I actually wanted to have buckles all down the sides and be draped with this and that. I'm, like, oh, that's way more complex
Heidi [00:08:30]:
ideas. So first, yeah, you your proposal needs to be like bulletproof in terms of like this is what you're getting and anything that creeps beyond this like a change in the garment complexity. Right? A change a big pivot in fabric mid project that makes us have to, like, resource. So I think part of it could be 2 things. The first thing, like, earlier in the process would be your discovery process. Like, if you start to see these signs early on because you are doing really, really in-depth discovery and you're like, okay. What are you thinking for fabric and and then they're like, well, I want this but I want the I wanna make 50 units or, you know, whatever.
Connie B [00:09:12]:
Yeah.
Heidi [00:09:13]:
Then you know in advance because Listen, this Listen, this is a really specialty fabric. We can't afford to make it because the minimums are too low. So this is gonna require some extensive sourcing on our side, which is this is why that price is this. So I think some of it is I mean, with pricing, it's all there's so much trial and error. And in each situation, it's a constant learning curve.
Connie B [00:09:50]:
Yeah.
Heidi [00:09:52]:
But that would be my first thing is, like, either your discovery process is not sufficient enough to understand all these nuances in advance. Mhmm. That you then go into the proposal knowing, okay, da da da da da. And then, you know, as these proposals get higher, like, this is where I always like to get on a call and walk through the proposal at a certain price. Right?
Connie B [00:10:15]:
Yes. Definitely.
Heidi [00:10:16]:
And and and explain and then you you can explain like, hey, you know, if you start to feel kickback on the price, so first of all, it's great because you can gauge people's reactions, even just visual subtle cues. And if you start to feel or see kickback, you can say, hey, you know, I understand maybe this is landing a little bit high for you. So we can talk about ways where we can get it down. We need to go with this more basic fabric. We need to take some of the buckles off the sleeve. Like, what have you. Right? I mean, you know all the things that can adjust the
Connie B [00:10:45]:
price. Yeah.
Heidi [00:10:47]:
But it so it's like, first, you doing sufficient discovery and vetting of the project to understand what goes into it, then you do doing sufficient education to the client of, like, why certain things are what they are, and then where there can be wiggle room. And then 3rd would be, like, really keeping those boundaries and speaking up when mid project the client changes the thing. You're like, cool. We can do that. I'm super happy to help you, and I wanna make sure this product is exceptional and is exactly what you want. But I also have to be realistic that this changes a lot of things and was required a lot more time on our side. Yeah. Yeah.
Heidi [00:11:31]:
So those would be the things I would think about in order to, like, manage this a little bit better. And even with down to, like, they don't wanna manufacture in China. You're, like, great. Well, manufacturing elsewhere is going to mean this. Mhmm. And right? And and, of course, those things become easier over time because you build your network of suppliers and you know? But that is still an ongoing thing. And and for the for you know, you get some clients that really wants this specialty thing. You're like, well, we have to find that specialty thing.
Heidi [00:12:04]:
Like, this is a really unique request, and that's gonna require although, I mean, I'm a big proponent of charging for sourcing even if you already have a contact. It's sourcing is sourcing. Yeah. Yeah. And I know that that gets different when you guys are doing the manufacturing yourselves, like how your business is arranged. Yeah. So those are some of my thoughts. How does that land for you? Yeah.
Connie B [00:12:25]:
I think that actually makes a lot of sense. I think just really dialing in further in the discovery call is probably what I need to do. I think my questions aren't going deep enough, so I'm not getting all of that really nuanced information upfront when I probably should be. I think that's, that's great advice, Heidi. Thank you so much.