How do you handle the finances of a project?

I have a bunch of questions about the general financial aspects of a commissioned project and would love to hear how you all handle them. What have you found that works or doesn't work?

It is my top priority to 100% fair and honest to both myself and my clients so we both feel like we get what we wanted once the project is said and done.

Specifically, I'm interested in the following kinds of details:
  1. Generating a quote - What factors do you include? How do you split things up? How do you itemize the task? Do you charge per-glyph? By the hour? Per feature set? Per language?
  2. Getting paid - Do you stick to the quote price or do you require some pricing flexibility if the project changes (e.g., if it takes more/less time than you anticipated)? Do you require payment up-front, either in-full or an initiation portion? Do you ask for a lump sum at the end? Do you consider financing options for the client (i.e., breaking up the total into monthly payments with interest)?
Or, do you do something completely different? I'd love to hear your success and horror stories.

Comments

  • Ray LarabieRay Larabie Posts: 676
    edited May 16
    1: Before I quote, I send a test font with 3-4 glyphs. The client suggests revisions, we go back and forth until the client is satisfied with the design. Occasionally I'll do a quick interpolation test so they client can decide how many weights they require. I find that it takes too long to write emails, hoping the client understands the terminology than it takes to make a few test glyphs. I think it's especially important to show the client exactly what you mean by italics. The difference in the amount of work involved in creating obliques vs. classical italics can add to the workload significantly so there can be no misunderstanding about that. While I'm making the test font, I'm getting an idea of how how the overall font will take so it serves two purposes. I occasionally give separate quotes including language options. For example, when a client has some interest in Greek and Cyrillic but it's not required for their project, they'll sometime request a quote.

    2: I always stick to the price quote unless there are significant changes requested. Like adding Greek or more weights. I ask for a lump sum at the end. Since all my commissioned work is non-exclusive, I make it clear in the discussion that the work is to be non-exclusive. If the client decides to bail out, I end up with a font that I can sell...it's a risk I'm willing to bear. In the invoice, I like to keep the commissioning of the typeface and the licensing cost separate. That way, if the clients wants to extend the license, the discussion is simple. I never considered financing options. Clients always pay. Some slower than others but I've never been stiffed. Ah well... there was Typodermic's very first client. The company vanished without a trace. Only once in 20 years.

    Horror story: Basically a brilliant art director was replaced by a terrible committee. In this case I had a detailed contract up front but that ended up being bad for me as I couldn't easily bail out of the project. If there weren't for that contract I would have absolutely quit.
  • James PuckettJames Puckett Posts: 1,472
    edited May 16
    1. I break estimates down to big line items: Design, kerning, hinting. More detail than that just bores and confuses busy art directors. If they need more detail they’ll ask. 

    I haven’t produced a detailed quote in years because the real quote is done by the firm hiring me and shown to their client. I save detail for the contract. Spending a day or two writing a great contract after the client agrees to the prices is important. Wasting a day or two on a detailed quote just to get shot down by somebody who expected it to cost ten times less is silly.

    If someone wants something that will eat up lots of time, like distressed outlines with hints, I explain up front what the work entails. So they don’t think I’m just taking them for a ride. 

    2. After I work out an estimate I tack on at least 20% for unplanned stuff that inevitably comes up. This saves time getting approval to spend more when the AD has already run the project four weeks past deadline. And it makes everyone look good when the project doesn’t run up extra expenses.

    In a contract I break down every stage of the project. I cap rounds of revisions at each stage. If the client starts pushing me past the 20% pad, or requests extra revisions, I start charging by the hour.

    I generally ask for a quarter, third, or half up front. From there the contract is written with break points where I keep getting paid or I stop working. Clients don’t actually send out checks or electronic transfers overnight to keep the project going. And I don’t actually expect them to. But I want people to know up front that I’m not a piker who spends three months on a project and then begs for money after sending final files. If I wrap up stage 2 and the check for initial prototyping hasn’t cleared I just stop working until it does.

    Until a check clears I don’t send a client any files other than PDFs with a huge DRAFT watermark and copyright notices on every page. My clients are ADs so they do the same thing to their clients. They know what it means and it reminds them to stay on top of accounting.

    Don’t set up financing for clients. If they need to borrow money they can go to a bank. If they can’t get the money from a bank it’s because they probably won’t make their payments. Don’t feel bad for not helping people by working on the crazy terms they say they need. If they really need crazy terms from the designer they shouldn’t even be in business. And you shouldn’t help them dig their own hole.
  • AbrahamLeeAbrahamLee Posts: 113
    Thank you both for sharing your experiences and advice. It's precisely what I was looking for. I think we can all learn and benefit from sharing these experiences with each other.

    Anyone else? @Thomas Phinney? @LeMo aka PatternMan aka Frank E Blokland? @PabloImpallari? @Hrant H. Papazian? @Chris Lozos? @Christian Thalmann? @Mark Simonson? @Bhikkhu Pesala? @DanRhatigan? @Nick Shinn? @SiDaniels? @JoyceKetterer? @TimAhrens? @John Hudson? @erik spiekermann? @Georg Seifert? @George Thomas? @Nina Stössinger? @Dyana Weissman

    Anyone else I should have (or should not have) tagged that could share their experiences? I'm so grateful to all of you and have learned so much already.
  • AbrahamLeeAbrahamLee Posts: 113
    Thanks for sharing those! I'll watch them today as soon as I can.
  • Dyana WeissmanDyana Weissman Posts: 153
    edited May 16
    In general, my formula is broken down into two parts. 1. The work itself. How many days will this take? And then charge the daily rate. There are SO many variables. A basic Latin sans is going to take way less time than a basic Latin script with texture. 2. The licensing/exclusivity. Which someone else at my company quotes on.

    The videos @Thierry Blancpain posted make very good points.

    As for getting paid, it varies. Overall we have wonderful clients and we don't usually require payment until the project is finished. Some clients, however, might have a complicated payment system, or international red tape to go through, and will take longer to pay. So occasionally we charge a percent up front. Some clients will negotiate a kill fee if they're not entirely sure what they need. I always always always say "changes in scope may cost extra." Scope creep is the worst. It starts with a small change here... and then another one... and then just one more. I let some slide—they are to be expected with newer clients, for example. I usually give a warning the first time "this is considered a change in scope, but we'll let it slide for now," just so the client isn't surprised later when I do charge a fee. 
  • AbrahamLeeAbrahamLee Posts: 113
    Thanks, Dyana! I appreciate you sharing your experiences and advice on scope-creep. This reminded me of another question I had, which relates closely to this topic: How do you define "the project is finished"? Do you allow for a certain number of revisions in your time estimate?
  • Dyana WeissmanDyana Weissman Posts: 153
    I define a project as finished as when the client is satisfied. Usually I factor in 2-3 revisions in my schedule per milestone. With good, precise communication, they're usually not all needed. 
  • AbrahamLeeAbrahamLee Posts: 113
    That's exactly what I've been doing. Glad we're on the same page. ;)
  • Hrant H. PapazianHrant H. Papazian Posts: 931
    edited May 16
    I'm not good at evaluating how much my work is worth, so my only good piece of advice is this: spend time researching what others have charged; this includes having many off-the-record conversations...
  • James ToddJames Todd Posts: 213
    My system is essentially the same as Thierry’s except I will do some initial work before the first check clears—the client will only get screenshots until the first payment is made.

    I usually do 2 revisions; beyond that, I will have a talk to redefine scope (as clearly something went wrong) and bill them as though it were a new project as I don’t like to charge hourly. This is not a common situation.
  • AbrahamLeeAbrahamLee Posts: 113
    Thanks, @Hrant H. Papazian and @James Todd, for the great advice. Screenshots are a great idea.
  • Since you name-tagged me: I haven't done any commissioned work so far, so I wouldn't know. In the case of the Cormorant family, the «negotiations» basically came down to Dave Crossland making an offer and me going «OMG how much...?!». :grimace:
  • AbrahamLeeAbrahamLee Posts: 113
    edited May 16
    In the case of the Cormorant family, the «negotiations» basically came down to Dave Crossland making an offer and me going «OMG how much...?!». :grimace:
    Thanks for responding, Christian. If only all "negotiations" were that easy ;) Nice job on Cormorant, by the way.
  • AbrahamLeeAbrahamLee Posts: 113
    Thanks for chiming in, @John Hudson! I usually plan my time on a per-glyph basis as well, but this gave me some great ideas for better itemizing my quotes. Much appreciated!
  • AbrahamLeeAbrahamLee Posts: 113
    edited May 17
    These should be useful videos to watch for you:
    Thank you so much, @Thierry Blancpain, for sharing these! I really learned a lot about how to value my own work and to be tactful when discussing finances with a client. Much appreciated!
  • AbrahamLeeAbrahamLee Posts: 113
    @Dave Crossland, you've commissioned a bunch of fonts. What advice would you give from that perspective?
  • Hi Abraham,
    I don’t think that I can be of much help here. The last time the Dutch Type Library worked for third parties was roughly 15 years ago. Back then we mostly made quotes on a take it or leave it basis. But I reckon the market has changed a bit during the past one and a half decade. Nowadays we fully focus on the independent development of DTL fonts and font-production software. Personally I occasionally do some work for customers only if I really, really like the job. The last time was already four years ago when I made the  calligraphic lettering of the Abdication Act of the former Dutch queen.

    Best, Frank
  • AbrahamLeeAbrahamLee Posts: 113
    The last time the Dutch Type Library worked for third parties was roughly 15 years ago. Back then we mostly made quotes on a take it or leave it basis.
    Thanks for your feedback! What was your rubric for quoting this way?
  • AbrahamLeeAbrahamLee Posts: 113
    @Adam Twardoch, how about you? Any comments to my questions?
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