Inspired by the recent “My Top 10 Business Design Failure” presentation in the Notebook, I thought about this from my business standpoint and decided to share my own business lessons and thoughts. I’ll keep this short(ish) and bittersweet.
Working without a down payment
Not sure why designers do this, but I receive quite a few emails asking me if I obtain a down payment. The answer is yes and no. Yes, I require money upfront, but no I don’t consider this a down payment. It’s considered a retainer. If you are a busy designer, most likely you are scheduling work well in advance. In order to secure working together for a date that extends beyond a month I require a 25% retainer with an additional 25% upon the start date of the project. Never start work without payment.
Handing over files / launching before final payment is received
I’m certain I will catch a few disagreements on this one, but I make this statement out of sheer confidence: Don’t deliver files until final payment is received. I hear one too many stories about designers finishing work and receiving final payment six months later, or worse, not at all. Plus it only takes one bad experience for you to learn. You don’t walk into the grocery store and say I will pay you in full for the milk later, so why should you run your business any differently.
Attending to the “needed it yesterday” crowd
Great design and successful solutions take time to achieve (sorry clients, we don’t have these incredible ideas stored away for later). Great work evolves and transcends over rigorous thinking, designing, testing, re-thinking and more. Abiding by the “needed the website yesterday” deadline or other unrealistic deadlines often ends in bad business or let down. On a similar note, I often find that when you ask clients why they are in such a rush they aren’t really sure of why. Educate them on your process.
Too many concepts
Everyone likes options, but showing too many only creates more of a problem. Personally, I hate going to a restaurant with a menu of 100 dishes to choose from. Not only does it take me an hour to decide, but it usually results in me picking the worst one. Same goes for design work. Showing less is more.
Not billing by the hour
Here’s another point that I know will keep the comments below busy, but after making the mistake my first year of freelancing I’ve learned that billing by the hours spent makes everyone happier. Although I know this is more difficult having clients understand and conform to these terms, let me explain a bit how I go about this.
First and foremost, let the client know that you bill by the hour at the rate of $XXX.XX (manage expectations for the get-go). Most clients will want to know how much they will spend on the effort in full, so what I typically do is provide them with a starting price based on the scope of the project and what I suggest. I tell them based on this quote I am able to allocate XXX hours into that particular endeavor, however anything over will billed hourly and added onto the final invoice (also I am also able to obtain the initial payment based on this quote).
I also supply my clients with milestones documented in the signed contract — yes, that’s another mistake: not working with a signed contract — this way we are able to stay on schedule and allows the client to see how the process fits into the budget. Which leads me to my next point…
Not obtaining a budget
In the words of “The Million Dollar Man” Ted DiBiase, “Everyone has their price.” Kindly let your clients know that sharing their budget saves a lot of headache and time for the both of you. It allows designers to determine how much time they can allocate to a project and enables us to advise the client on how best to use their money.
Doing what you do best
I’m not going to debate if designers should code and if coders should design, but both sides should have a solid understanding of the others medium at the least. I will however stand by the statement that you should stick to what you do best. If you’re a designer that knows how to code, but doesn’t enjoy it, then why do it? Give yourself the chance to do what you enjoy by bringing in a developer that has the same passion for what he enjoys. Trust me, the work in its entirety will show for it and you will give yourself to grow more, not to mention live a happier life and lead a happier business.
Good design and good business is about teaching
If you wanted to make things look pretty, maybe you should have been a painter. Good design and even better designers teach their clients and share your experiences with others. Educating clients add more value than a rounded corner button. Transparency goes a hell of a long way in our industry. Actually any industry for that matter (businesses take note). Teaching allows you to formulate your own opinion and point of view, which helps to become a better “salesman” (I apologize now for using that word), get more work and demonstrating confidence in your decisions.
Understanding design is a craft
In the words of Mark Boulton, “Web design is a craft. And like other crafts – letterpress printing or book-binding – they’re not generally taught in colleges or universities.” Being in this fast moving industry means you need to constantly be on top of it and both want and need to continue maturing to prosper. For those that don’t know this already, but working in the web right now is the place to be and it’s even better as a designer with the amount of work that is out there currently. Hone your skills and pay the bills folks. Don’t forget to have fun while doing it though.
Great points all around, Brian.
When I first started asking for deposits I was unsure if clients would go for it, but it turns out they usually see you more as more of a professional when you ask. It shows you’ve been around the block.
Great post Brian.
I’ve always thought of it to be effective to be transparent with the clients in what they’re getting based on their budget. This way there’s no misconception or scheming.
Educating clients is a huge point. I love when I get a vision for a client, and I’ll show them what other brands similar to them are doing. A lot of times this creates a bigger project with a more consistent strategy since I am in charge of more of their web presence.
Good marks, Brian. I think it is most important to have a contract laid out for clients, talk about saving yourself some headaches.
Thanks for sharing.
Good chunks of advice! These are all things I wish I’d known when I started out… But you live & learn. :) Hopefully the young’uns out there will heed all these & save themselves some headaches.
Perfect list of advice Brian. Tough to implement sometimes, but they’re worth it every step of the way.
Interesting article, Brian. As someone who’s looking to make the leap into freelance soon, articles like this are invaluable.
YES! This is great article. The only thing I might add is “Not being afraid to say no.” The few bad projects I’ve had always arose from a situation where I should have said no to the job. Sometimes it’s just poor chemistry between client and designer, sometimes it’s a job outside your expertise, but I try to listen to my gut when taking jobs.
A good reminder to the well seasoned and freshly baked. Stand your grounds people! Your effort is definitely worth something ~
Also remember that most clients does not have a direction, point them to one… All the best!!!
Nice post Brian. A question on charging by the hour: For design work, you’re allocating X hours to a project based on your hourly rate. It stands to reason that the more hours the client can afford, the better the overall result.
However, if you were a coder hired to develop existing designs, would you apply the same principle or would you work on a fixed project fee?
Some great advice that I strongly agree with. Brian, you never cease to show wisdom in the industry.
Do some designers really start working without an initial payment (what I call a project start fee)? Better yet: how can anyone deliver final files without the final payment first? Sounds like madness to me; though, and you mentioned this in the post Brian, I had to learn the hard way the value of requesting final payment before sending final work.
Would love to see a series of posts like these, best practices / what I do.
I love that you made a 1986 WWF reference in this article. I might have drooled a bit of the morning joe.
Since you charge by the hour, do you have only one rate? Or does it fluctuate depending on the size of the organization, how many users will see it, etc.?
Great article. I have implemented a lot of these into my business over the last year and they have made a big difference. The retainer fee especially has been a lifesaver. The biggest benefit of it for me is definitely weeding out the serious clients form the not-so-serious ones. A lot think they will have the money in a couple months when you are set to start, then its not there when the funds are due. Requiring a retainer has protected me, as well as saved me from some potential nightmares.
I also love your take on designers knowing how to code. Knowing how to code is one thing, doing it for every design is another. I could hand code all of my designs, but I find it more efficient and that the site ends up better in the long run, when I outsource the coding. I have a coder that I contract for all my projects, so he understands my style and we communicate well. While there is an additional cost to doing it this way, I find I can handle more projects, and that makes up for the contracting cost.
The one area that I have not been able to implement is the hourly cost. Clients seem very gun shy about hourly fees, even when I give them an estimate for the project along with it. My solution has been to spell out the scope of the project along with a set cost. Then include an hourly rate for anything above and beyond that, such as going over a certain number of revisions. Any further suggestions on how to make clients comfortable with hourly rates would be great!
Some great advice there Brian!especially the part about billing hourly – making it fit into the overall budget. great insights man.thanks!
I have to say I agree with most all of your points Brian, Especially the last one. At the pace you learn things and the dedication you must have in order to work (and work well) as a web designer, it MUST be a craft. It takes a special person to be a web designer. It isn’t as simple as walking into a university and earning a degree after a few years of pixel pushing. At the very least, you have to understand how the internet works and understand it’s users.
Really good article, it clarified some points from the slideshow for me, it also puts back down to earth which is good considering it’s easy to go astray because of your own or the client’s ambitions.
I agree with about 90% of what is above. I’m just not a big fan of charging per hour. But everything else was spot on.
Daniel,
Yes, only one hourly rate. They should be paying for your time, experience, knowledge, etc.
Dave,
Well the more hours put forth can change the scope of the project (ie: A/B Testing, more iterations, etc)… and yes, a better overall result. As a developer you should still work on an hourly rate. Things happen during the process; elements get added; elements get deleted; problems occur. Time is valuable and should be accounted for.
Great tips and advices Brian. Getting a down payment, working under a contract and not trying to be a hero when it comes to deadlines is a must!
Hi Brian, excellent article
I wanted to ask you something about contracts, what if you have a client you have never met and only communicated via email – how would you go about getting them a contract? post it and as them to send it back signed?
Thanks
Richard,
Actually 99.98% of my clients I’ve never met in person, so much of my daily routine is communicating via email. I’ll email them them contract and ask if they can either scan or fax (yep, still have me an old fax machine) it back to me.
If you take on work within a month of contact do you not set a retainer and bill 50% once you start the project?
S. Davis,
Yes. In total I ask for 50% before the work begins. The 25% retainer is to secure “the future.”
Nice share, thanks :)
Nice post as always!
Really nice and relevant article Brian. I completely agree with every point mentioned!
One other point I would maybe add to the list would be “get a feel for your client before accepting any project”. It’s important to look out for tell tale signs early on… it will save you a lot of future stress and hassle!
This article is a good read:
http://www.webdesignerdepot.com/2010/12/7-essential-red-flags-to-watch-out-for-in-new-clients/
Great advice Brian,
I know from experience that it can be difficult to stick to these business practices when you’re just starting out freelancing. It can be very easy to let a client make excuses and slide by without a contract or retainer in an effort to appease them because you’re desparate for the work. Unfortunately, I think that’s the same reason some designers agree to do spec work too.
Great advice! I certainly learned the hard way about some of these points (like getting money upfront). Very valuable article, thanks!
I agree that in terms of presenting design concepts, showing less is more, but how much less? How many UI concepts do you present for a new website / client? 1? 2? 3?
I remember seeing an interview with Steve Jobs discussing the Apple identity development with Paul Rand and he was saying how despite asking for a few concepts, Paul was set on giving them only one concept, which he defined as the only appropriate solution. I have always admired that boldness and confidence but it’s much harder to pull that off when you’re not Paul Rand.
the retainer fee is a great tip, I’ll implement that in the future.
The biggest argument against charging by the hour is that if you work fast, then you’re going to be earning less and less as you get better, or you have to keep changing your rates, and end up with very high hourly rates?
it would be great if you could share a sample proposal of yours, and maybe a contract!
There’s a lot of good stuff here, Brian. Here’s my question on how you charge: I can see the point of giving an estimate on a starting price based on X hours at $X per hour. Do you ever estimate too many hours? I can see a client reasoning that if you spend more time, you’re going to charge them extra, but if you spend less time, they are still paying the estimate price—essentially paying a higher price per hour of your time.
Seth,
Thanks. My estimates are based on a starting point for how many hours I can invest / allocate to the project. When I break down the milestone “checklist” I say, well I will allocate this much time to wireframing, this much time to design, this much time to testing, etc. Make sense? This way there is never “over estimating.”
Paul,
Each year you should be increasing your rates anyways. You are right, you get better, faster, smarter… and it should be accounted for. If you state to a client that you charge $500 per hour and you will bill them at the end, yes, you’re right, they will get a bit scared, but if you say, “Hey, I charge $500 per hour, and based on my hourly rate and time I feel that needs to be invested and allocated into your effort, here is the starting price of $xxx,xxx.xx. Anything outside of the projects scope will be billed accordingly.” Educating your clients on the process helps with this.
Michael,
It really depends on what their budget allows for. If they are on a tight budget and the project only allows for 1 concept, then thats what they get. Budgets can often change the scope of the project to meet their main needs without compromising quality (or the opposite).
Thanks Brian, I see what you mean. I guess it just takes experience to determine a good number for each of those milestones, and then discipline to spend exactly that amount of time on each phase.
Nice write-up sir— especially the bit about too many concepts being like a 100 item restaurant menu. It doesn’t always work, but we try and keep the feedback / iteration process purposeful. Asking questions about likes, dislikes, and the reasoning behind requested changes can save lots of time & money.
You make some great points here and sometimes it is hard to get that client to pay for hours over your projected finish time. I am going to put some of these suggestions to the test on a client I am dealing with tomorrow – wish me luck!!
Hi Brian,
Thanks for writing this excellent perspective on some of the points I’d shared in my presentation “My Top 10 Design Business Failures.”
My only impression in reading through your thoughts and some of the comments is regarding your approach of sharing your hourly rate, establishing a fee based on your hourly rate times the amount of time to complete a set of tasks, and a request for a client paying for a retained number of hours to start work.
This pricing approach makes good sense when working in a freelance capacity, and can help protect you when scope creep inevitably starts to rear its ugly, furry head.
However, there are a few things to be aware of when establishing this model.
You’ll need to be firm about never discounting or adjusting your rate—only the hours that relate to the scope you’re seeking to establish.
If you’re providing an estimate that is being compared against other firms, you risk a competitor using solely a fixed fee. A fixed fee does create a perception of value on the part of the client, especially if you’re positioning yourself against other agencies that used fixed fee estimates.
A big mistake that firms make is in pitching via fixed fee, however, is that they don’t share burndown details with a client over the life of a project. They try to disguise that the fixed fee is just an hourly estimate for their resources.
For this reason, more risk in going with the fixed fee versus the (possibly) sliding fee based on scope increase, because the fixed-fee firm is going to try at all costs to stay within the budget, while the designer that is tracking to an hourly estimate can share burndown details with a client to manage expectations and calibrate activities to try to reach the end goal. (Otherwise, change orders may be required.)
Tracking to an hourly estimate can add more project management and client service energy on the part of the freelance designer or agency, but it can make for more transparent client communications, fostering the kind of trust that can lead to not only completing great projects, but also encouraging future business from those clients and possible referrals.
Nice post Brian. A question on charging by the hour: For design work, you’re allocating X hours to a project based on your hourly rate. It stands to reason that the more hours the client can afford, the better the overall result.
You mention that you schedule a lot of work and ask for a deposit (retainer) on ordering and at the start date – do you do this for repeat clientele as well, or just new clients?
Thanks
“Business Logo”,
Yes, for both new and repeat clients – this ensures and protects my business and from potentially passing up other great work that comes along.
Brian,
I have to say I agree with you entirely on this post, especially ‘too many concepts’. I’ve found in my experience that having less truly is more. I also have found that clients who are less savvy choose what they like for themselves, as opposed to what the users would like or need.
All in all, great post!
Thank you for the post. I disagree on a few points (only 4) and I think it’s just because I don’t have such a large business plan as you do. But I think they are all well thought out and work great for people in our industry according to their needs.
I don’t bill by the hour, instead I use a pricing system and put up front that I charge for extra revisions as you do.
But, having said that, I think the rest of the article is informative and educational. Please don’t hate me cause I work differently : ]
I wish I could have come to your lecture at SCAD.
Ah crap, wish I would have read this a couple weeks ago. Already got burned by the first two.
You should throw in a ‘Be Careful About Working w/ Friends & Family’ rule on the list.
The points you have raised in this article are all very important. I especially agree with not starting any project without a retainer. If a client wants to book you and respects your work then any decent client would not have a problem paying something upfront to secure your services. If they do, then maybe you would want to consider if that client is for you. To often you can waste valuable time chasing up clients for payment that you should be putting to better use in doing work for your paying customers.
Great post and lovely website by the way. I will be checking back regularly.
Great Article Brian. I’d say there are a lot of different ways to do business, I happen to agree with 90% of what you said. My only difference in opinion lies with the section about being a teacher.
I don’t know that it is our job to educate our clients on the better points of design. I came to this conclusion after contemplating the thoughts of Michael Bierut from Pentagram. He doesn’t get into those details with clients because it would be a little like asking a great architect why he decided to put the electrical conduits here or a rounded corner there. You would just trust the architect to manage the finer details, and that is why you hired him.
This leads to good clients vs. bad clients. Good clients being one of two people:
1. Someone who just wants results and trusts you implicitly to do your job. Doesn’t get involved with the fine details, just knows what he/she wants and when they see it.
and 2. Someone who really really gets design.
Then there are bad clients:
The ones who are wading in the kiddy pool, who know just enough to want to micromanage and become a disaster client. (who need to be educated).
So I will end this with a direct quote from Michael himself: “Bad clients lead to more bad clients… Doing good work for good clients will lead to more good clients!” — Michael Bierut
Which do YOU want? I think that’s more choice then circumstance.
I agree with the division between a ‘good’ or ‘bad’ client. In practical terms however, I generally find myself making a compromise somewhere in between.
Amen on all fronts, Brian. You nailed it right on the head, and it makes me pat myself on the back for sticking to my own guns for so long. I share your policies in running your business. The only thing I do a bit differently is I ask for a full 50% of the total cost up front BEFORE any work is done, rather than 25% and then 25% again before the work begins.
It is great to get this reinforcement from you, helping other web designers to realize that this is a business, just like any other business, and we should run it as such. You don’t go into Subway or Five Guys burgers and say “Hi. I’d like this and this, but I’ll pay you in about three weeks time. How’s that?” Wrong equation for sure.
Great article, Brian!
Great post Brian. I definitely agree with trying to get a budget from the client before giving them a cost. Without it you end up shooting in the dark – wasting your time and theirs.