Where to Begin? Estimating A Project for a New Prospect

A friend writes, sounding somewhat distressed: "I just got an email from a totally random person asking me to prepare an estimate for a website. How much information, or what kind of information, do you need from a new and unknown client before you are able to make an estimate for a website design project?"

My friend then quoted the prospective client's email. It is a scenario that should be familiar to designers everywhere: the person seems to have unlimited needs -- a website that is easy to navigate, easy for her to update, has a shopping cart feature, and appears at the top of the Google rankings -- but doesn't seem to have a business model that would pay for that kind of website.

First of all, it would be great to develop some marketing language on your website that drives qualified prospects further down your "sales funnel" while screening out unqualified prospects. A simple description of sample website budgets usually suffices to separate the boys from the men. You can even link to articles describing website budgets. Make sure to position yourself as a seasoned designer who doesn't have to chase the business owner who has $500 burning a hole in his pocket, and those people will never call you in the first place. When they do, the first question you should ask is "Have you read our section on pricing?" If not, refer them to it and have them re-contact you when they're through.

I'm assuming you don't have something like that on your website, though (I don't). In that case, you need to take the bull by the horns and ask the tough question about budget first. A popular selling system I once learned a little bit about says that the proper first few steps in selling a product or service is:

1. Establish that the person needs your product or service (which you do by listening to the prospect, not by touting your product or service, by the way).

2. Find out what the person's budget is. If they say "I have no budget" or "I don't want to share my budget," that is a good time to terminate the conversation. 

In the case where you suspect someone has no idea of how much what they're asking for costs, you could start out the conversation or the email by saying, "That is a pretty big project and could easily run into months of work and thousands of dollars. Would you mind sharing with me how much you have budgeted for the design work?" Be careful not to insult the person; every now and then you will meet an independently wealthy person who wants to spend thirty large on a website for their flower shop (nail salon, landscaping service, etc.)

3. Find out if the person you are in contact with has the authority to make the decision to purchase your product or service. If not, re-negotiate the meeting or presentation so that the decision-makers are present. I can't think of a polite way to say this, but basically, if the decision to hire you as a vendor is important enough to the company, they will have their decision-makers meet you. If this cannot be arranged, don't bother moving forward.

I actually can't remember the last steps in the sales cycle recommended by this training program (thank goodness I'm not a sales person!) But the point of the first three steps is to set things up so you are not wasting your time presenting to people who don't need you, can't afford you, or aren't going to make the decision.

One theme that runs through these questions and answers is that we, as designers (or any other kind of business person for that matter) should not be afraid to talk about money. If anything, our straightforwardness and clarity will increase our respect and make the whole process go more smoothly.

When Should You Work For Free?

A couple of recessions ago, I first opened my doors for business. I had a one-room office upstairs from the Welfare Department in Davis Square, a few years before Davis Square was widely acknowledged as "hip." Because of the somewhat central location, there was a fair bit of walk-in business; because of the recession, a lot of it was people who had a mid-life crisis confused with a business plan.

I was presented with many opportunities to work for free; I turned down most of them and should have turned down more of them. Graphic design firms at any stage of their life-cycle are often asked to perform work for free. Many (including me, on many occasions) refer to this work as "pro bono." (This seems a bit precious to me. Pro bono, which a lot of people think is Latin for 'sucker,' properly refers to professional and especially legal work performed at no cost. Is graphic design a profession? Webster's defines a profession as "a calling requiring specialized knowledge and often long and intensive academic preparation".)

It usually does not make sense to work for free. Graphic designers went to school to study graphic design, not banking or philanthropy. There are a few times when it does make sense to work for free:

Personal Involvement

Many of us have a high level of personal involvement with a project. The classic example is designing a website for one's boyfriend. Other examples include organizations that you participate in and feel strongly about. Your rich uncle who's looking for a website for free does not fall into this category!

Passion

If you care -- passionately -- about a cause or organization, it might make sense to work for free. Be careful, though -- in my opinion, well-managed non-profits are also well-funded and can pay for work. There are many, many causes and organizations that need help; you can't save everyone. My studio had a discounted rate for non-profits, which was a nice compromise between making a contribution and making a living.

Business Reasons

If you have a clear and quantifiable business reason to do work for free, go for it. Years ago I served on the board of directors of the Somerville Chamber of Commerce and did their first website for free. (Their website now is way better than the first one I did; I did a good design but we didn't have much content). At the end of my first year of service I could point to at least three clients I had gotten as a result of my work with the Chamber.

When Should You Especially Not Work For Free?

You will often be asked to work "on spec," which is short for "speculative." InvestorWords.com defines "on spec" as "doing a job without any guarantee of being paid, in the hope of winning future business." If you are considering working on spec, I have a simple question for you -- do you really want future business from an organization who won't pay for the first job? Nuff said.

A variation of working "on spec" is the ever-popular "logo contest." It's cute when an elementary school puts on a logo contest. In all other situations: puh-leez.

Friends or relatives provide a particularly challenging opportunity to work for free. Many people do not understand the true costs of graphic design -- especially the number of hours involved. It takes ten hours to put up even the most basic website. If you do it for free, those ten hours are taken away from family, exercise, sleep, and so on. Would you ask your best friend to mow your lawn ten times this summer? (If yes, don't contact me -- I don't need you as a friend!)

The day I stopped doing so much work for free was the day I had my son. I realized that I could say, "I can't pay attention to you right now; Mommy has to work" . . . but wouldn't feel good about saying, "I can't pay attention to you right now; Mommy is a sucker."

Do You Charge For The First Meeting?

A friend writes: "Do you charge for initial meetings and proposals when working with an established client you're charging by the hour for a project?"

In an earlier post discussing who benefits from a publication, I coined the phrase "the benefit principle." 

Simply put, the person or organization who commissions a project, benefits from it, and should pay all costs of its creation and publication. 

A designer's fee structure is basically a construct designed to give a client a fair way of controlling project costs, while ensuring that the designer gets paid fairly for his work. A meeting with someone who has not yet become a client falls under the umbrella of a sales call and is not billable. A meeting to discuss a flat-fee project may not be advertised as billable, but the smart (and fair-minded) designer will make sure that the flat fee covers the labor involved in the meeting.

By the same token, a meeting held at the beginning of a project, for which the designer is being paid by the hour, should be billed at the same hourly rate as the rest of the project (or at the same hourly rate that is charged for meetings, if this rate is different from what the designer charges for design or production work).

All sorts of unreasonable things can happen if a designer doesn't charge for initial meetings. First, a client can commission a project and then change his mind, thus forcing the designer to have wasted the meeting time without getting paid at all. Second, clients can get very casual about wasting a designer's time, asking designers to meet with them for an hour for a two-hour project, for example. Both of these phenomena can result in a designer spending an awful lot of time chasing meetings and very little time being paid.

A designer's time is valuable, and a client needs to understand this going into a project. My suggestion (which of course I have implemented only very rarely) is to send a letter out at the beginning of a new business relationship, explaining how your fees are structured. If you haven't done this, as most of us don't, at least, for your own sake, do include the time you've spent in the meeting as part of the hours you bill for at the end of the project. 

Otherwise, just stay home!

Why Am I Blogging?

I am a marketing associate for Second Wind, a wind energy technology firm. I love my job, and have been at it since 2008. Before that, I ran my own full-time design studio, Studio N, for 19 years. During those 19 years I learned a lot about business ethics, trade practices, and so on, and have spent a good amount of time chatting with my fellow designers about business practices.

My friend Ann of Gallager Design, one of the best visual designers I know, is always hobnobbing with me about design practices and business challenges. Today she emailed me, saying "You have to start a blog with all your brilliant thoughts on design (for both clients and designers!)

So, this blog is intended for anyone who buys or sells graphic design services. It is aimed mostly at graphic designers who wrestle with business challenges, but it is also intended to educate people who deal with designers. Above all, it is aimed at promoting fair and ethical business practices within the design field. I look forward to your thoughts and comments!

Who Pays for Mistakes?

In 20 years of doing business as a graphic designer, the most painful lesson I have ever learned - and learned, and learned - is that it is critical to have quality control procedures in place. Even more critical is to create an understanding ahead of time of who pays for mistakes.

It doesn't matter how clever your concept is - if you publish a job with errors, your client is going to be angry.

I usually make clients sign a form that clients must sign that authorizes a job to go to press, and explains that the client is responsible for the cost of any errors not caught before the job goes to press.

Almost every time we have deviated from this procedure, we have gotten nailed - we have an angry client whose job is messed up, and the last thing the client wants to do is to pay for a reprint.

Why do we ever deviate from this procedure? Usually because of time pressure.

The best insurance for both clients and designers is to have a memorandum of understanding, a written policy, or a form that explains that it is the client who bears the cost of all mistakes. Then, whatever procedures you have agreed to, the client knows that, bottom line, accuracy is the client's responsibility and not the designer's.

The Benefit Principle

If you buy graphic design services and printing, you may ask - why is this fair? Simply put, it is because the client benefits from publication of the work, not the designer. The designer is working at the client's behest, usually for an hourly fee. It is the client who should pay all costs of publication. A client who cannot afford to assume the risk of reprint costs and other liabilities arising from printing or publishing should not be printing or publishing. 

All policies, forms, and procedures can then flow from this principle. Design quality control procedures that protect the client against mistakes, and enforce them even at the cost of delaying a project, and mistakes will be rare. Before you embark on those quality control procedures, make sure your client agrees with the 'benefit principle.' Then in the rare instances a mistake occurs, you will not lose your shirt.