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Resources For Consultancy Fees?

Postby Dugan27 » March 19th, 2012, 11:33 pm


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Hello Core,

One of my long term career end point possibilities is starting a design and engineering consulting firm. A good friend is a fairly high end IP attorney who has recently hung his own shingle and started a private practice. He's come to me with a client who has a pretty fantastic idea for a product but doesn't have the design or engineering resources to reduce it to practice or get it to a place where it could be shopped or licensed; refinement, prototyping, testing, documentation....the stuff I do, etc.

He knows I'm flirting with the idea of consultancy, and offered me the work. Does anyone have some good resources for:

1) project proposal templates for this type of work
2) References for pay-scales for this type of work
3) Any other random bits of advice related to freelance work of this nature

Thanks!

DO

Re: Resources For Consultancy Fees?

Postby stay youth » March 21st, 2012, 5:04 pm


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Hi I recently started my own consultancy, and in terms of looking for baselines it all depends. Acceptable design fees in Boise are going to different vastly from those in San Francisco. Also depends on your experience. A better way of determing fees is to do a self asssement. How much do you need to cover your overhead? How much do you want to make in profit? How much work do you need to reach these goals. I operate in San Francisco and did a self assesment of what I need to charge and how much billing time I need to meet my goals. everyone it seems is a designer in SF, but there is also a lot of work to go around. I also take into consideration my network of contacts and my own experience. No one will give you a set rate that they charge and you shouldnt expect that either. its a game , charge too low and it hurts business for everyone, too high and no one will hire you. I found my rates and project scopes through my own trial and error. Be smart and honest with the potential client on what you can actually deliver and then help them fill in the gaps of what you cant do by reaching out to your own network. I realized that business is never set in stone but more of an educated guess at best and a lot of BS at worst.

Sorry not what you were looking for, but i think you need to think about reframing the question for yourself. Good luck

Re: Resources For Consultancy Fees?

Postby rkuchinsky » March 21st, 2012, 5:07 pm

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Maybe not the answer you want to hear, but if you don't know how much you should charge for something, you probably shouldn't be doing the work. Not knowing how much to charge means you might not know what is involved, how long it will take you, etc.

Easy to get over your head, esp. for a project as big in scope as what you mention, which isn't good for you or the client...

R
The Directive Collective
http://www.directivecollective.com

Re: Resources For Consultancy Fees?

Postby warrenginn » March 21st, 2012, 5:15 pm

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May I suggest a good "starter book" for those interested in spinning up their own consultancy?

Talent Is Not Enough: Business Secrets For Designers
http://www.amazon.com/gp/product/0321702026

Lots of solid basic info in there.

~w~
Warren Ginn, FIDSA
GinnDesign, LLC
http://www.ginndesign.com

Assistant Professor of the Practice, Industrial Design
NC State University
http://design.ncsu.edu/people/warren-ginn-fidsa

Re: Resources For Consultancy Fees?

Postby stay youth » March 21st, 2012, 5:25 pm


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Thats a great book Warren, I also suggest working with your local small business admin office. They are eager to help andf offer great informative classes on business related topics. Design consulting is 5% design 95% trying to figure how to pay your taxes, your lawyer, your cpa

Re: Resources For Consultancy Fees?

Postby warrenginn » March 21st, 2012, 5:27 pm

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stay youth wrote:Thats a great book Warren, I also suggest working with your local small business admin office. They are eager to help andf offer great informative classes on business related topics. Design consulting is 5% design 95% trying to figure how to pay your taxes, your lawyer, your cpa


So true...

~w~
Warren Ginn, FIDSA
GinnDesign, LLC
http://www.ginndesign.com

Assistant Professor of the Practice, Industrial Design
NC State University
http://design.ncsu.edu/people/warren-ginn-fidsa

Re: Resources For Consultancy Fees?

Postby moonstruck » March 21st, 2012, 7:53 pm


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I had posted a similar question here a few years ago and got some good suggestions.
I also liked the book “Talent is not enough”as a resource,
and also found
“Business and Legal Forms for Designers”
http://www.amazon.com/Business-Legal-Fo ... 1581153988
very helpful.

“The Designer's Guide to Marketing and Pricing”
http://www.amazon.com/The-Designers-Gui ... 700&sr=1-1
provides good basic business advice, even though it is more geared towards graphic and web designers.
One of the authors, Ilise Benun, has a website with free resources and regular newsletters and podcasts:
http://www.marketing-mentor.com/html/qu ... chive.html

The British Design Council also has good resources (some of the legal information will be based on UK law):
http://www.designcouncil.org.uk/resourc ... rs/Guides/

I like Stay Youth's tip with the local small business admin office. I meet with a business adviser once a month to discuss non-design related business issues.

Re: Resources For Consultancy Fees?

Postby Dugan27 » March 22nd, 2012, 12:27 pm


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Thank you for the responses, even the ones who's who think I'm in over my head. :) I do know what the project entails and I'm very comfortable with doing the work. It's what I've been doing within companies for 12 years; including budgeting for projects and setting time lines, allocating resources, etc. What I don't have is experience with budgeting, and contract creation, for working as a contractor.

If it was as simple as doing the math on what my time costs while working for projects within my company the budgeting thing would be easy, and maybe that's as simple as it needs to be. However, I don't want to be way off (high or low) on what the going rate for this type of work is in my area (Chicago).

I suspect the consulting rate would be higher since people working on their own, outside of a company, have other costs that people working in an organization don't.

Re: Resources For Consultancy Fees?

Postby Dugan27 » March 22nd, 2012, 12:41 pm


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warrenginn wrote:May I suggest a good "starter book" for those interested in spinning up their own consultancy?

Talent Is Not Enough: Business Secrets For Designers
http://www.amazon.com/gp/product/0321702026

Lots of solid basic info in there.

~w~


That looks great! Thank you, I'll be ordering it momentarily.

Another book that was suggested to me was "The Strategy and Tactics of Pricing" by Thomas Nagle and John Hogan

http://www.amazon.com/The-Strategy-Tact ... 0136106811

Re: Resources For Consultancy Fees?

Postby Dugan27 » March 22nd, 2012, 12:45 pm


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stay youth wrote:Thats a great book Warren, I also suggest working with your local small business admin office. They are eager to help andf offer great informative classes on business related topics. Design consulting is 5% design 95% trying to figure how to pay your taxes, your lawyer, your cpa


Good advice, thank you. It's that 95% where I know I have a lot of learning to do.

Re: Resources For Consultancy Fees?

Postby Dugan27 » March 22nd, 2012, 12:51 pm


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rkuchinsky wrote:Maybe not the answer you want to hear, but if you don't know how much you should charge for something, you probably shouldn't be doing the work.


Hmmm...I fail to see the logic behind this statement. Pricing has no effect on ability to perform the work. I've done similar projects for free many times for friends in the past all of which were successful.

If this made sense, no one could ever start doing independent contractor work no matter how well they could perform the work. :?

Re: Resources For Consultancy Fees?

Postby stay youth » March 22nd, 2012, 1:09 pm


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I believe there are some guides at to what people are making in your area. I know AIGA publishes one for graphics, i cant remember for ID. Basically you have to think what is the minimum I want to take in profit and then determine the scope of what your overhead is ( both in general for operating and for each specific project) Its all a hypothetical, you will only be able to know if your charging the right amount if you have your overhead covered and the clients accepts your proposal. Basically I started off charging way too little, figuring i just wanted to get the work. Now I take into consideration what my yearly profit goal is subtract COGS, indirect expenses. I promise you will not get the right rate at first.

Re: Resources For Consultancy Fees?

Postby bcpid » March 27th, 2012, 2:04 pm


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Hmmm...I fail to see the logic behind this statement. Pricing has no effect on ability to perform the work. I've done similar projects for free many times for friends in the past all of which were successful.

If this made sense, no one could ever start doing independent contractor work no matter how well they could perform the work. :?


If you don't know what to charge by the hour, or how many hours it takes to do something, then no, you can't do the work unless your business plan involves being a starving artist or going out of business in three weeks (unless you have a trust fund), which is totally useless to the client you can no longer service due to lack of funding.

Re: Resources For Consultancy Fees?

Postby Travisimo » March 27th, 2012, 4:34 pm

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some of those books look like good buys - the Pricing Strategy one especially

I had a friend who was a local design company GM help me set my initial rates and I've slowly raised them. He also helped with some of the initial contracts I used. Maybe you could call upon a friend that hires freelancers with your experience... as said before, it varies depending on experience, location, clients, type of work, etc

Some other Random Advice: Plan for taxes from the beginning, and it's cool you already mentioned CPAs - keeping good records and opening up a relationship with a local tax profession keeps confusion and that kind of stress/workload down. Plus if the government ever questions your figures they will be well worth their cost

Re: Resources For Consultancy Fees?

Postby warrenginn » January 4th, 2015, 5:03 pm

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Just read his article posted on Fastcodesign.com:

"How Much Should You Charge For Design Work?"
http://www.fastcodesign.com/3025992/how ... rk-a-guide

It's written from the perspective of a graphic designer / illustrator, but thought it was interesting, particularly the discussion of "rights-management" for her clients' use of her work. In the wold or product design, we don't have the luxury of placing such limitations on our work.

On a somewhat related note, it is part of my contract that the rights and ownership of the IP I create for my clients is transferred in exchange for payment of my fees. But I have never "withheld" such rights until I received final payment from the client since my terms are generally 30 days and the client typically has a tighter production deadline.

Have any of you held back on that final deliverable until receiving your final payment (or the check cleared)? What happened when that final payment never came? Did you hold the final database for "hostage" until receiving payment, or use the client's acceptance of the final database as acknowledgement that the project was complete and payment was due?

Fortunately I've never run into that situation and hopefully never will (knock on wood).

w
Warren Ginn, FIDSA
GinnDesign, LLC
http://www.ginndesign.com

Assistant Professor of the Practice, Industrial Design
NC State University
http://design.ncsu.edu/people/warren-ginn-fidsa

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