Re: Retainer / Part Time ID

Postby rkuchinsky » December 13th, 2012, 4:01 pm

User avatar

rkuchinsky
Moderator
Moderator
 
Posts: 5248
Joined: July 3rd, 2005, 9:20 am
Location: Toronto, Canada
yo wrote:
Here is an example. I'll use round numbers for the sake of argument.
80k (salary)
40k expenses (facilities, equipment, IT, operations)
30k profit
_______________
$150k per year



What's the difference in your example between profit and salary?

I don't see any problem with letting the client know the rate. Makes it much easier to bill for additional items (extra X not covered in the proposal will take Y hours= $Z).


R
Richard Kuchinsky / Directive Creator
http://www.rkuchinsky.com

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

Re: Retainer / Part Time ID

Postby rkuchinsky » December 13th, 2012, 4:09 pm

User avatar

rkuchinsky
Moderator
Moderator
 
Posts: 5248
Joined: July 3rd, 2005, 9:20 am
Location: Toronto, Canada
Also, keep in mind, your rate will also likely determine how much you are working. You can have a super high rate and freelance every so often on the side, or a lower rate and work constantly. Also depends on the scope of the project. Smaller, shorter projects can bill at a higher rate, but if you are working on long or extended projects a high rate wouldn't really make sense. Esp. more so in a retainer situation.

R
Richard Kuchinsky / Directive Creator
http://www.rkuchinsky.com

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

Re: Retainer / Part Time ID

Postby yo » December 13th, 2012, 5:27 pm

User avatar

yo
Administration
Administration
 
Posts: 13027
Joined: January 5th, 2004, 6:57 pm
Location: SoCal
rkuchinsky wrote:
yo wrote:
Here is an example. I'll use round numbers for the sake of argument.
80k (salary)
40k expenses (facilities, equipment, IT, operations)
30k profit
_______________
$150k per year



What's the difference in your example between profit and salary?

I don't see any problem with letting the client know the rate. Makes it much easier to bill for additional items (extra X not covered in the proposal will take Y hours= $Z).


R


Profit is pure profit or margin. Salary is what you need to live. As an industry expert Richard, you certainly command a higher profit margin than someone just starting. You could work it into salary of course.

Anything not in scope of the original proposal is a separate track of work that would get its own estimate.

Everyone likes to work differently. Not saying the way I do it is THE right way, just sharing how I do it. This is just how I learned to do it at the firms I worked. I don't disclose the hourly because I don't like to sell hours (IE justify why something takes a certain period of time) I feel better selling the solution (IE this solution is worth X), and I like trying to beat my estimate. Just how I was "raised" if you will. Sometimes I go over, sometimes I stay under.

Re: Retainer / Part Time ID

Postby rkuchinsky » December 13th, 2012, 5:36 pm

User avatar

rkuchinsky
Moderator
Moderator
 
Posts: 5248
Joined: July 3rd, 2005, 9:20 am
Location: Toronto, Canada
Thanks for the clarification. Makes sense. I never really looked at it that way, as I see cost of living as subjective. I see it more about what do I need to live the life I would like. I could probably live in a smaller place, not eat out or buy nice things and be comfy on half as much, but I know how I'd like to live. Profit I suppose is savings then left over from living and enjoying life?

I can see the advantages of both ways to do it. My approach is basically a hybrid approach. The way I do it, I break down each step by hours so that they can see where the time/money is going but I bill on a flat per project rate. That way, it's harder for a client to look at a number and try to negotiate a bottom line number that looks like I made it up, and I can point to the hours and tell them this is how long it takes. They usually appreciate the more detailed breakdown (I get comments on the format of my proposals all the time), and it seems more professional than just a random number.

I also feel that sharing the rate helps communicate my level of experience and skill. They can see right at the start that I'm a professional and command professional rates, and know that they are paying for what I can deliver in both time and money, whereas they could probably find a student to do it for $50/hr they would get what they pay for.

Of course, my hours are estimates, and for fixed jobs I don't actually count/present hours, but know internally if I'm on budget or not and then adjust for future projects accordingly.

R
Richard Kuchinsky / Directive Creator
http://www.rkuchinsky.com

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

Re: Retainer / Part Time ID

Postby imadesigner » December 14th, 2012, 12:35 am


imadesigner
step one
step one
 
Posts: 23
Joined: April 21st, 2007, 9:08 am
Thank you all so much for your articulate, thoughtful, quick responses! It's a huge help to have your input and I appreciate access to the community and all of your collective experience. Hopefully this might even help someone else. I certainly enjoy the debate and it sharpens my negotiating skills.

The salary survey from Coroflot is interesting, but would benefit from clarification (types included and costs) of benefits.

Re: Retainer / Part Time ID

Postby yo » December 14th, 2012, 1:01 am

User avatar

yo
Administration
Administration
 
Posts: 13027
Joined: January 5th, 2004, 6:57 pm
Location: SoCal
Richard, I think assume I learned to do it that way because I worked for firms where you had salaries and then margin on top of that.

Re: Retainer / Part Time ID

Postby yo » December 14th, 2012, 1:05 am

User avatar

yo
Administration
Administration
 
Posts: 13027
Joined: January 5th, 2004, 6:57 pm
Location: SoCal
imadesigner, no problem. This has been a helpful discussion for me as well. We are pretty good about being open around here.

Re: Retainer / Part Time ID

Postby beanworks » December 14th, 2012, 7:53 am


beanworks
step one
step one
 
Posts: 43
Joined: August 29th, 2010, 3:17 pm
Location: Detroit Michigan
I would suggest you set aside your aspirations of starting a consultancy until you adjust your perspective. You seem to be thinking alot about yourself without much regard to your client. You've stated that you want to work part time but not tooo part time, you want to be with your family but you need to make 'x' amount, me, me, me. I'm not being a dick, its just that your are providing a service and your success will be determined by how great your service is. Being self employed has very little to do with "self". Start thinking more about the other guy (your customer).
Brian E.

Re: Retainer / Part Time ID

Postby NURB » December 14th, 2012, 8:20 am

User avatar

NURB
Moderator
Moderator
 
Posts: 4348
Joined: November 10th, 2005, 1:31 pm
Location: MPLS
Fulfilling the financial obligations of supporting a family always comes first. Doesn't matter if you're a designer or a doctor or a librarian, making enough to support your family always comes first.
Chris Haar

twitter:@chrishaar

Those who define design as knowing how to use Illustrator will be condemned to using Illustrator their entire career. - @Mike_FTW

Re: Retainer / Part Time ID

Postby iab » December 14th, 2012, 12:49 pm


iab
full self-realization
full self-realization
 
Posts: 1750
Joined: January 5th, 2004, 6:03 pm
Being a consultant is selfish.

So what?

Very few, nearly none for that fact, are magical. We are not hired because we have some special talent. We are hired because our clients do not want to invest in recreating our capablities when they only need them a few times a year. Of course there are exceptions to this, but it is much cheaper for them to budget a couple of projects instead of budgeting for permanent personnel and their overhead.

So I am certainly not beholding to my client for anything other than the 2-6 week project. Or part time work if that is our agreement. And if that 1 project covers my nut for the year what exactly obligates me to do anything else for that client? For the reamaining 46 weeks of the year, I can be ensconced in velvet and eating a block of cheese as large as a battery.

Are you telling me I can't?

Re: Retainer / Part Time ID

Postby NURB » December 14th, 2012, 12:53 pm

User avatar

NURB
Moderator
Moderator
 
Posts: 4348
Joined: November 10th, 2005, 1:31 pm
Location: MPLS
Constanza would be proud...
Chris Haar

twitter:@chrishaar

Those who define design as knowing how to use Illustrator will be condemned to using Illustrator their entire career. - @Mike_FTW

Re: Retainer / Part Time ID

Postby j42 » March 18th, 2013, 12:08 am


j42
 
Posts: 2
Joined: December 19th, 2007, 3:11 pm
Location: Ohio
I'm curious to find out what the OP decided to do and how it went?

Also, the comments and explanations from rkuchinsky and yo about calculating rates are some of the better explanations in the forums, even though they've been covered many times. Thanks guys, keep it up.

Re: Retainer / Part Time ID

Postby Generatewhatsnext » March 19th, 2013, 7:53 pm

User avatar

Generatewhatsnext
step four
step four
 
Posts: 430
Joined: January 24th, 2011, 9:04 pm
Location: Maryland
Man, this thread was tiring. I'll be under my desk until the alarm clock goes off.
Scott Snider
Partner, Product Development
Generator, inc.
http://www.generatewhatsnext.com
http://www.twitter.com/generatewhtsnxt
http://www.linkedin.com/company/1023934
skype: generatewhatsnext

Previous

Return to general design discussion

©2014 Core77, Inc. All rights reserved
about | contact us | advertise | mailing list