Minimum Project Fee
The smallest amount a business will charge for any project engagement.
Definition
A minimum project fee is the smallest amount a business will quote for any engagement, regardless of actual time or resources required. It accounts for the fixed costs of taking on any project: sales time, onboarding, administrative overhead, and context-switching costs.
Minimum fees acknowledge that small projects often aren't proportionally cheaper than larger ones. A $500 project might take nearly as much sales and admin effort as a $5,000 project, making very small projects unprofitable.
Why It Matters
Minimum fees protect profitability on small engagements. Without them, you might spend more time quoting and managing small projects than they're worth. Minimums also filter out clients who aren't a good fit for your pricing level.
Communicating minimums upfront respects everyone's time. Clients with small budgets can seek appropriate providers, and you avoid investing time in quotes that won't work.
Examples
- 1
A web development agency has a $5,000 minimum project fee, as their process and overhead make smaller projects unprofitable.
- 2
A photographer quotes: "My minimum session fee is $500, which includes up to 2 hours of shooting and 20 edited images."
- 3
A consultant states: "I have a minimum engagement of 10 hours ($2,000). For smaller questions, I offer a 1-hour paid consultation."
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