How to Start a Software Dev Agency

How to scope and quote your first dev project

When scoping and quoting for your first project as a software development agency, precision, transparency, and communication are your main allies. Here’s a comprehensive approach to ensure both you and your client are on the same page:

Understand the Client’s Requirements

Begin with a detailed discovery phase. Arrange meetings or calls with the client to discuss their vision, goals, and specific needs. Ask probing questions to uncover not just what they want but why they want it, which can reveal deeper requirements. Document everything and creating a requirements specification document that both parties can agree upon. Even if you are planning to use some kind of iterative development process, which involves a more flexible approach to requirements capture and scope change, a defined project specification upfront allows you to fix the initial scope and quote appropriately.

Develop the Scope of Work

Based on the requirements, define the scope of work. This should clearly outline the project’s deliverables, the timeline, and any particular methodologies or technologies that will be used. Avoid technical jargon; instead, describe the scope in terms that are clear to someone who is not a developer.

Quote the Project

With a scope of work in hand, you can prepare a quote. Determine if the project will be billed at a fixed rate or on a time and materials basis. For your first project, consider a fixed rate as it can simplify negotiations. When calculating your quote, take into account the complexity of the project, your overheads, and the value the project brings to the client. Always include a buffer for unforeseen work.

Present Your Solution

Craft a compelling proposal that includes the project scope, your quote, a proposed timeline, and an overview of your agency’s expertise. Present this solution in a way that aligns with the client’s business objectives, showing them the return on their investment. Be prepared to make adjustments based on their feedback.

Contractual Agreements

Once the client is ready to proceed, it’s essential to draft a contract. This contract should include the scope of work, payment terms, intellectual property rights, confidentiality clauses, and any warranties or maintenance terms post-launch. Clauses regarding dispute resolution and termination should also be included to protect both parties.

Payment Terms

Ask for a deposit before you begin work. This not only secures the client’s commitment but also helps your cash flow. Common practice is to ask for 20-50% upfront. For the remainder, set up milestone payments tied to the delivery of specific pieces of work, which keeps the cash coming in and reduces risk. Include clear payment terms in your contract to avoid any confusion later.

Getting the Go-Ahead

Once the client is happy with the project plan and the contract, get a written sign-off on the scope of work, the quote, and the contract. This can be a physical signature or an electronic one. Ensure that the deposit is paid before commencing any work.

By following these steps, you will establish a professional approach to scoping and quoting projects. This not only helps in the smooth running of your first project but also sets a precedent for the operational standards of your agency moving forward.