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steppenwolf
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Hi all,
Well, it is pretty interesting (and not really expected but trying to adopt) that almost each potential client that is approaching me as a different partnership requirement. Used to work for a design consultancy but never did we experience such diversity of collab requirements.
Anyways. This time I am approached by a startup that is developing a product/technology that is aiming, (actually) negotiating to sell to an international company. All is good except for them except some issues related to looks of the product and some mechanical issues.

Due to their limited budget, the startup asked me to be their "design consultant" whom they could reach anytime they have questions, issues, perhaps to do some sketches to give to their inhouse engineer to modify the product (they need to keep things internally to keep cost low..). Also, i will need to bring them in touch with experienced mech. engineer to be their consultant as well.
The consultation will be ongoing, until the product is prototyped and somehow ready to be produced.

issue 1
Except the sketche(s) they may need, the rest of the work is "consultation". This is just too abstract to me and I am actually oriented to a kind of retainer. Just agree with them to prepay a set of hours and then we see if then need more of my time.

issue2
Supposing we agree for 10 work hours for an X amount/h, after a phone call that lasts 1 hour, I am expected to send an email to the client notifying about 10-1 = 9 remaining hours? Or is there a software (slack style) you may be using for such partnerships?

Any other ideas/suggestions on such partnership?

Thanks!

ps. bellow is the answer by rkuchinsky, kindly provided in another post. The only difference here is that the "deliverabe" is consultation wheres in the other post the deliverable was a series of actual products

rkuchinsky wrote:I've never really understood the reluctance of designers to quote an hourly rate. No matter how you price yourself (flat rate, by design, etc.) eventually it comes down to how many hours do you have to work on the job, and can't do something else, hence an hourly rate. Every other profession goes by hourly rate, and when you are working salary, it is essentially an hourly rate multiple by full time job job hours.

If you are designing a bag, or doing research, either way an hour is an hour. I used to try to price meetings, research etc. differently than design, but for a single person it doesn't make sense. Why would you ever spend any time on the phone if you know that at the end of the 1 hour call you just made half of what you would make if you were designing if you had different rates? You would either not work very much, or be extremely limited in what you do.

Set a rate that is reasonable. You only have to provide a total hours/month, not hours for each project, assuming the hours per month is more than a single project, it will work out. The whole point of a retainer is that on the average, things will work out. let's say your rate is 200E/h. You might be asked for a doodle sketch that takes an hour and it's 200E in cost/time. Might sounds low for the job. You might have to spend 5 hours surfing the internet for research and you've made 1000E. Good money. You spend 1 hour on the phone and you got 200E. Pretty sweet. No different than a full time salaried position where you make X total which equals Y per hour (salary/workdays/hours/day) and you might spend your time sketching, in a meeting doing nothing, fixing the copier, etc.

Just consider it as essentially a full time position and salary, with the exception that you cap the hours, so you can develop your own studio and do other things. it's the easiest way to transition from consultant to a long term relationship and many large studios have similar agreements with brands/companies. The biggest benefit is you can just go ahead and be the go to guy to get stuff done and you don't have to negotiate or make a proposal for every small design or background job that comes up. Better to be making money than proposals
Last edited by steppenwolf on January 25th, 2017, 7:46 am, edited 2 times in total.


iab
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1. This of course depends entirely on your trust of the company to pay, but you can sell it as a grandiose gesture on your part. Instead of a retainer, bill them for time and materials after the fact. You bill them on a 15 day schedule. The upside of this arrangement is the gospel for any consultant, the current job is irrelevant, what are you doing for the next job. Your good faith will have them hire you the next time.

2. Depends on what the client wants. But first I would propose sending them an itemization every 15 days. If they want a shorter timeline, let them tell you.


steppenwolf
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iab, thanks for your feedback. Your first proposal is interesting option. What is tricky though here, is that as they need though "just" a prototype as a proof of concept to demonstrate basic principles and then the international company will, most likely, customize the design, they will not really need me for a "next step". Furthermore, as they will be selling technology and their business model is just that (not to become a consumer electronics company), i do not see any future with them. Your second proposal sounds reasonable. thnx


iab
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Don't forget the long view, you are building relationships. Those relationships can serve you in a month, year or decade. How those future relationships form is dependent on what you do now.

It is always about the next job whether it is directly in front of you or not.


steppenwolf
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That is also true ;-)


steppenwolf
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Another question regarding a prepaid retainer of let's say X hours. Do you think it is advisable to break down the hours to the specifics actions that are expected to consume these X hours? For example A hours research B hours teleconference etc. or just sell a package of X hours to reach, what I consider, a minimum fee amount I consider as worthwhile in order to sell them my contacts, experience on their domain and skills?
I am mostly inclined to this direction. An open retainer billed in the end of each month, eventually for this type of projects I think is not favorable as I have no commitment from their side of collaboration and I will eventually may need to sell skills for just a couple of hours that I am not willing to do so.

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KenoLeon
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I am just going to poke in here to say that a contract is basically a negotiation, you sit down with a list of things you want, the conditions that seem not only fair but ideal for you to work under from your point of view, so these conditions will change from person to person, along with what constitutes a fair agreement, you then send them your list with a let me know what you think, if they agree you (your lawyer unless you have some experience with contracts) writes it down in legalese, then you send the contract, at this point they usually backtrack and add their clauses at which point you say let me review them, you modify or not, iterate ad nauseam and at some point you sign the contract.

This was posted before, I think it's worth posting again:

[vimeo]http://vimeo.com/22053820[/vimeo]
Last edited by KenoLeon on January 30th, 2017, 1:45 pm, edited 1 time in total.
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yo
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That video is always worth a re watch!

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rkuchinsky
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steppenwolf wrote:Another question regarding a prepaid retainer of let's say X hours. Do you think it is advisable to break down the hours to the specifics actions that are expected to consume these X hours? For example A hours research B hours teleconference etc. or just sell a package of X hours to reach, what I consider, a minimum fee amount I consider as worthwhile in order to sell them my contacts, experience on their domain and skills?
I am mostly inclined to this direction. An open retainer billed in the end of each month, eventually for this type of projects I think is not favorable as I have no commitment from their side of collaboration and I will eventually may need to sell skills for just a couple of hours that I am not willing to do so.



A retainer is not typically open. You would normally provide a quote based on a minimum amount of hours and either A)Bill that amount if they've used it up or not. B)Have some sort of agreement to roll over hours to be used in the future within a max amount of time.

Generally I bill retainers at the start of the month BEFORE the work is done, so there is no issue being paid and they have an incentive to use the hours they already paid for. You can also make an arrangement for any hours used over and on top of the bucket of hours to either carry forward for some time (perhaps you may have a surplus/deficit of +/-10%) to be credited and accounted for quarterly or end of a project/cycle.

The general point of a retainer is some sort of guaranteed amount of work from your end, while giving them a priority service and rate in exchange.

What's the issue selling skills for a couple of hours? If your rates are in place, that shouldn't be an issue.

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


steppenwolf
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@KenoLeon, hehe, thanks, that is an all time classic :-)
@rkuchinsky, in the end I billed a pre-paid X amount of hours for $Z/hour. It worked, they agreed, payed and we started our collaboration. I also set a 2 month time-frame they will be allowed to use these X hours. Will see how it works :-)
Thanks again all for your input.


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