Start-Up & Annual Costs Office Furniture (Desks, Chairs, Tables) $0.00 Computer hardware and so ware $0.00 Association or Membership Fees $0.00 Printing - Business Cards, Marketing Materials $0.00 Office Decoration $0.00 So ware - One time purchase $0.00 Lease Deposits $0.00 Legal or Accounting Retainers $0.00 Business licenses and permits $0.00 Sponsorships or Marketing $0.00 Travel, Conferences $0.00 Other $0.00 Total $0.00 Split over 12 months (Divide total among 12 months equally) = COST PER MONTH $0.00 Ongoing Monthly Expenses Salary of owner-manager (amount you need to pay yourself) $0.00 All other salaries, wages, & commissions $0.00 Payroll taxes or self-employment tax $0.00 Rent $0.00 Equipment lease payments $0.00 Advertising (print, PPC, Twitter, Facebook) $0.00 Postage & shipping costs $0.00 Supplies (inks, toners, labels, paper goods, etc.) $0.00 Cell Phone $0.00 IVN or Phone Services $0.00 Virtual Assistants $0.00 Utilities $0.00 Internet $0.00 Hosting & Servers (AWS $0.00 SaaS (Dropbox, Creative Cloud, Slack, Basecamp, etc.) $0.00 General business insurance $0.00 Other Insurance (business vehicles, etc.) $0.00 Health insurance $0.00 Interest & principal on loans & credit cards $0.00 Misc. Debt $0.00 Recurring Legal and other professional fees $0.00 Miscellaneous $0.00 Total $0.00 TOTALS $0.00
Based on hard math • Can’t be reduced or backed off • Used in project estimates • Changed only by adjusting expenses or headcount • The same for every client & project • Not publicly disclosed • Based on vertical & horizontal market value • Can be reduced, just not less than shop rate • Only used when billing by time • Can be changed to increase profit • Varies by client & project • Publicly disclosed
• You’re paid for your time • Easy to sell • Easy to calculate • You’re in control of change requests • Unpredictable • Commoditizes your work • Limited opportunity for profit • Requires higher rates or markup to make significant margins
• Very predictable • Common and expected by clients • Opportunity for profit is high • Tendency to undercharge • Risk of going over budget and losing money • Tough to cover unexpected challenges • Commonality can lead to limited understanding of value
•Working with the same client on similar work regularly? Hourly •A project’s deliverables are unclear? Hourly •The client asks about money a lot up front? Project •The scope of the project changed several times when meeting with the client? Hourly •It’s clear you can get it done faster than the client’s estimate? Project •You’re doing very complex technology work? Hourly
for clients to “bargain you down” • Good for repeat clients and agencies • Good for clients with multiple businesses or business units • Good for template-oriented designers • Client feels in control • If you like avoiding confrontation • Minimal opportunity for profit without high volume • High volume means tight timelines • Difficult to do high-quality work • Little room for error
less client you have to replace each month •Fosters stronger client relationships, meaning less time spent re-learning new businesses over and over •Help with vertical marketing, become a SME. • Clients can think that you work for them as an employee • It can make you lazy if you slack off on pursuing additional work • Clients expect rollovers • The temptation to pad hours when you’re close to using up the retainer. It’s stealing.
to receive each month • The date you’re to be paid by • Any invoicing procedures you’re expected to follow • Exactly how much work and what type of work you expect to do • When your client needs to let you know about the month’s work by • What notification you need before the retainer relationship can be ended
Risk Documentation Difficulty to Sell Best Use Cases Hourly Billing Project-based Pricing Retainer Pricing Value-based Pricing Package Pricing Performance-based Pricing Equity Pricing Low Moderate Moderate High Low High Very High Moderate Moderate Low High Low Very High Very High High Low Moderate Low Moderate Very High Very High Very Low Low Moderate Very High Very Low High Moderate Freelance, Technology Design, UI, FED Content, UX, Dev Consulting, UX, Obj. Prog. Branding, Design, Web Tech, Apps, Software, UX UX, UI, Apps, Software, Tech
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