Ok, I love these types of questions. Here is why.
You guys are all stuck in the past....sorry but your age is showing
. The old days of this is my labor price and this is the material and therefore this is my cost and this is my selling price etc. Fooey.
Time to get to the real world.
Real world is about value.
I will get back to the value issue is a second.
But first lets look at what you saying to yourself.
You are in a discussion with yourself (any us) where you are negotiating with yourself to beat yourself down to a price you think with your outlook, were you in their shoes what would you pay.
You are already broaching the aspect of future work yet have no track record with them or them with you. So now in anticipation of the carrot you kill your own deal. Why? You are focused on cost not value.
I trully believe this is the huge issue with many of the self employed or small businesses out there.
Bear with me you will see what i am about here.
Lets look at a chair.
Say Mrs or Mr. X wants to buy 4 chairs. These chairs will reside in the kitchen and get daily use. They are not into showing these chairs off they want a functional usable chair. They would like it to last and they would like it to be made of natural material, easy to keep clean with a wipe down should something be spilt on them.
Next lets look at Mr and Mrs London Hyde Park the Jones. They have dinner parties, the chairs are to be used in their dinning room which is modeled on 18th century furniture. They have a cook and a butler and so to them what their guests think and feel when they walk in the room and see these new chairs they are looking to purchase, is paramount.
I have deliberately created two obviously different far apart examples to demonstrate the point of value.
The value to the one party is as a piece to sit on. The value to the other has nothing to do with the functionality but everything to do with the objects presence and form finish appearance.
So would you price the two sets of chairs the same even if the clienst both wanted them out of say oak or hard maple or whatever wood.
Here you can remove the raw material if they are the same. but even then not quiet because what you can get away with in Mr and Mrs X's case is not what will fly in Mr. and Mrs. Hyde park.
Selling price is about what the buyer is prepared to pay for the value they seek.
You cannot offer a price without a half decent discussion and thorough understanding of the clients needs. Not the need for a chair, the real need. The need behind the chair.
So lets have a look at your prospective clients needs(note prospective you aint got the deal yet).
Again we aint gonna get into their name guys. So lets remember this very important point Stu is making.
To say the least, these chairs which i will call objects from now on, are critical to the success of their act.
Forget the fear factor of liability or get out of business. Deal with this issue properly and legally because whether you charge 10cents or $1000 dollars you gonna have the same problem so you either want to deal or not. Business is about risk and return. Cannot take the heat get out the kitchen. Good management mitigates risk.
So the objects are mission critical to these people.
The objects are used possibly multiple times per day. (dont forget practice sessions never mind shows).
This is a tool of the trade. Milwaukee versus Ryobi. No comparison.
So these are not chairs for Mr and Mrs X with a very narrow defined budget and they are not for Mr and Mrs Hyde Park with blank cheque book but completely different needs.
These are like buying a machine to a business. They are capital goods. They are expected to work and work hard for long hours and a long time before we need to replace them. Maintenance yes just like a machine i would buy if i were running a factory of some sort.
Next these objects are not going to be life and death. If you look at the movie their is safety harness strapped to the guy.
But these objects need to perform to the requirement. In my observation, precision and durability of material, build, and design are all critical here.
No material with possible checks that under pressure and load will split or shatter. No joints that unless wanted (hey i cannot see what they got now and the detail of give or leeway ) that are flexible or maybe the exact opposite they do want some flex.
These objects most importantly are critical to the brand, the entity has built with this act. If they fail in anyway, it affects the image of the performance.
People are paying for the intrigue, excitement and spectacle of the maginificence of the show and its success not a nightly object failure.
This sets these objects apart from anything available. Hence they need to be special order. These guys should be laying down a spec of their needs. BUt they are artists not project managers or contract managers. They need these items to be precision made (precision need not mean tight tolerance but conformance to all their needs). These are custom made objects not something which under normal circumstances would be jigged and produced in a quantity of greater than what Mr and Mrs X are looking for. Certainly not built by a craftsman with an artistic bent such as Mr and Mrs Hyde Park would be looking for.
You need to go into a negotiation here first. Not throw out a price. Go see the show, then meet with them, discuss the intricacies of what they need the object to do. When doing this reinforce the need of the object if it is to fulfill their specific requirement. This indirectly formulates a spec in their mind and helps them see
you realize and
understand what is expected.
The value of your work in creating the objects now will get away from the objects and cost. It becomes the value of you satisfying their need and you demonstrating that you understand the issues involved in making such objects and your ability to meet their need.
Done correctly they get to the point where in their mind no other person can satisfy their need. Even if they get better quotes. Why.
Each other person bidding is at the level of "here is the cost and i can make an object level". You need to rise above that in your demonstration of value to them and will have when you do this.
A deal and a relationship with them, if that is what you want, is about being able to meet their need on an ongoing basis. About understanding their goal, not yours, and helping them achieve it.
Take Rennies Kitchen remodel. You may ask what the heck has that to do with this thread.
I say lots. Rennie demonstrated he had a need and was of a particular nature and specific goal in mind when he bought his counter top.
The guys that drilled those holes completely never got it. They just drill holes. The value proposition to Rennie was to get the holes in the correct place. You need to be able to identify these requirements in the client before you commit to a job. This is where the value lies.
This is not i need 4 beers how much.
Its a question of what kind of beer drinker are you. How much do you like beer. What are your tastes like. Then you making a pick to match the beer to the client. A value add.
When you get the process right (its a selling process and method) then price is not even on the table. You insult and degrade the deal when the first thing you put on the table is price. And, being submissive and timid in pricing thinking this is going to get you a long term relationship is only going to loose you the deal. You need to take the responsibility.
Why? because every reaction i have seen here is looking at saying i will fall back on what a deal i gave them from a cost point of view, when things go wrong. "It wont be my fault look how little you paid"
You need to demonstrate that you can and will take the responsibility to meet their need. You can and will take the time to understand their need and translate that need into producing an object that fulfills their need.
Vaughn now works with/for a guy that hangs pictures for the wealthy. What is their need. The hardware involved is pennies but the need is that the art piece is mounted properly, safely and in a manner befitting the environment its in and in a secure manner. Then the bill charged has nothing to do with Vaugnn and his bosses cost or the hard ware cost. Its the price of happiness and piece of mind.
When you semi pros and pros get away from the way you were brought up in the trade and
your own sense of value, (you are not buying or paying for these things) and get in touch with the value proposition to the client, if and when you demonstrate such value proposition by being able to demonstrate you are the absolutely correct person to meet their needs then you will make money for your labor. (period).