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:
- 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?
- 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
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.
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.
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.
These should be useful videos to watch for you:
https://www.youtube.com/watch?v=RKXZ7t_RiOE
https://www.youtube.com/watch?v=C_X3L_AG5G4
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.
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.
Best, Frank