Providing a quote for an electronics project

[0x8086]

A client of mine has asked me to give him a quote for his LED sign project. The trouble is, I have no idea what is a fair price for the work. I don't want to overbid the work, but I definitely don't want to underbid the work either.

Here's a description:

The purpose of the project is to design for manufacture, and prototype an animated LED sign. The sign is a PCB with holes for an LED every 0.5" (on a grid) and is an ellipse of size 33" x 19". The sign must display an animated GIF at 16 frames per second and store data for 30 seconds of animation. The sign must be programmable. By programmable, I mean the animation the sign is displaying is sourced from an animated GIF file. This means there must be a software application to serialize the GIF and program it onto the sign. Each pixel in the GIF must be mapped to a LED on the sign, and the color of the pixel defines the PWM level for that particular LED.

Deliverables are: Bill of materials, Circuit Schematics, Prototype PCB (populated), GIF serialization application (windows), Microcontroller firmware, programming board (for desktop PC to LED sign interface)

I'm really curious what you guys think something like this is worth doing. Because I have zero experience bidding on electronics/software projects.

If you have any more questions about the project please ask. Thanks.

Edit: This is for a customer in the United States.

 

[keith1200rs]

It is critical to know what country you are in.

I think there are two possible prices - the customer's expectation and what is is worth to you. A third price would be what it is worth to the customer but that is largely irrelevant - it is only what they want to pay that matters.

Your best guess is to work out what it is worth to you based on your estimate of the time it would take you to do. So, if it took you 6 months to do, how much would you want to earn? You need to add the cost of parts.

It is possible that the amount you would charge and the customer's expectation are wildly different.

As you say '...a client of mine' I assume you are already in the business of providing quotes so know all this anyway?

Keith

 

[BradtheRad]

Similar animated LED signs are turning up in more and more places of retail. See if you can find out where they got their signs made.

Then visit the signmaker and pick up any information, price lists, etc. Do not let on you want to compete.

Or can you look through electronic supply catalogs and find similar signs? Or smaller ones surplus or used. Their prices might be guidelines for your bid.

Can you locate a manufacturer who will supply a ready-made LED board with the spacing and dimensions you want? Also grid hookup wiring. Power supply. Driving and/or multiplexing devices, if that comes with the technology. Because ready-made might cost less than gathering all the loose parts and assembling it yourself.

Or, is an elliptical LED board a specialty item which costs more than a rectangular board? If so (or if you can't obtain an elliptical), then can you start with a rectangular board and mask over it to make an elliptical opening? This method might also be needed if the software/ hardware cannot create an elliptical image.

 

[0x8086]

It is critical to know what country you are in.

I think there are two possible prices - the customer's expectation and what is is worth to you. A third price would be what it is worth to the customer but that is largely irrelevant - it is only what they want to pay that matters.

Your best guess is to work out what it is worth to you based on your estimate of the time it would take you to do. So, if it took you 6 months to do, how much would you want to earn? You need to add the cost of parts.

It is possible that the amount you would charge and the customer's expectation are wildly different.

As you say '...a client of mine' I assume you are already in the business of providing quotes so know all this anyway?

Keith

Good points. I live in Austin, TX and my client is somewhere in the United States. I say '...client of mine' because that is the relationship. I just started freelancing and I have never bid on a project before so I have no experience bidding projects. I suspect that most engineering companies would charge about $100 an hour though.

---------- Post added at 07:10 ---------- Previous post was at 07:05 ----------

Similar animated LED signs are turning up in more and more places of retail. See if you can find out where they got their signs made.

Then visit the signmaker and pick up any information, price lists, etc. Do not let on you want to compete.

Or can you look through electronic supply catalogs and find similar signs? Or smaller ones surplus or used. Their prices might be guidelines for your bid.

Can you locate a manufacturer who will supply a ready-made LED board with the spacing and dimensions you want? Also grid hookup wiring. Power supply. Driving and/or multiplexing devices, if that comes with the technology. Because ready-made might cost less than gathering all the loose parts and assembling it yourself.

Or, is an elliptical LED board a specialty item which costs more than a rectangular board? If so (or if you can't obtain an elliptical), then can you start with a rectangular board and mask over it to make an elliptical opening? This method might also be needed if the software/ hardware cannot create an elliptical image.

I suspect I should be able to find a PCB manufacturer who can cut out an ellipse from a silkscreen but I don't know for sure. As far as designing the board myself, I don't mind because I will be paid to do so. The problem for me is assessing what the correct price should be.

 

[keith1200rs]

It is tricky. I have been working for myself for 23 years and worked in a design consultancy before that and it is never straightforward. You might work out you costs (say based on $100 per hour) and decide it will cost $50k. The customer might want to pay $5k. In reality it might actually be worth $100k to him, but that is often irrelevant - when the customer has a fixed idea of the "value" to them then it is is often difficult to change their minds. In the end, it is a compromise. Sometimes I charge less for a job because I know it isn't worth more money to the company and I need the work. Other times you quote a high price because the company is a PITA and you don't really want the work. Good luck!

Keith.

 

[BradtheRad]

Do you have an idea how many signs the client hopes to make? If I were the client, I would regard cost of prototyping as spread out over the run of signs I expect to produce.

I'd be sad if I had to sell a thousand signs to recover the cost of prototyping.

I'd be happy if I could say 'the prototype only set me back by ten signs' profit.'

So a reasonable bid for my work might be 50 signs' profit. Or 25 signs if the client's a nice guy. I don't know the cost of parts, or whether you're asking the client to pay for parts.

Further considerations:
How big a part will you play in the production phase?
Will the finished sign be programmable by anyone with a computer?
Or will the client have his artist custom create animated images for each customer?
Or will you be the one doing that for each sign?
The prospect of continued paid business from your client may affect how you bid now.

 

[bohumilfulin]

Ut is job for more than 6months from my poiny of view. It is not easy. Sure very first idea is done very quickly but it is only one part of job. Say your self the lowest acceptable price for that job and real term of delivery. Booth multiply by 3. It is life.

Customners obviously wants to know price and term. Nobody accept hour pay style. If am wrong you are very close to be rich.

 

[keith1200rs]

I would never quote on the assumption that I would recover any of the development cost in production! You are not in control of the production demand. I know some companies who do such things but they tie the development in with a production order and have the muscle to enforce it.

Keith

 

[BradtheRad]

I would never quote on the assumption that I would recover any of the development cost in production! You are not in control of the production demand.

Yes. I didn't mean to sound as though I thought the OP should expect that.

Rather I was speaking as though inside the client's head. As the client makes plans to manufacture LED signs, he is hoping to recover his initial outlay as quickly as possible. I quoted breakeven points of 10 and 1,000 signs, but only as outside figures, with a more realistic figure lying somewhere in between.

I should have changed my next sentence to read, "So a reasonable bid for your work might be 50 signs' worth of estimated profit, as far as you can gauge ahead of time having incomplete information."

Of course I have no idea how many units the client expects to manufacture, nor what profit he expects to make per unit.