If you’re bidding hourly for projects, you might be leaving money on the table. How do fixed fee bids work? Why do it? What you need to know to protect yourself from being taken advantage of.
A handful of students from Otis College of Art and Design visited The Future/Blind headquarters to attend a workshop hosted by Chris Do. In this completely interactive workshop, Otis students without experience asked questions about doing business in the creative industry.
The most important agreement you make with any client before a project starts is how much. It affects every aspect of a job afterward and can mean the difference between success and failure, regardless of the quality and craftsmanship of a resulting product.
The positives? A well-defined budget can create a lot of profit if one knows how it is best spent. If you can outsource a project and get high-quality work for 10% of your quote, you’ve got 90% left as gross profit. A budget can help define a clear roadmap to financial success in the creative industry.
But what about the negative side of a creative budget? One word: Change. The universal constant of change tells us that eventually, something is going to have to be tweaked. Whether it’s the color, the timing, or where you’re going to place the front door, minds are always reordering facts looking for something better.
While this subconscious dedication to innovation is admirable, it can wear on us not just financially, but emotionally. Creative industry leaders must act in a professional manner that considers the positions of both their client and their business. Approaching all client revision requests with a change order can harm business/client relationships, but constantly allowing these requests to eat up your budget will likely close your business’ doors sooner than later.
Chris Do also takes some time to expand on why he hates working with artists…well, sometimes.
1:18 What is gross profit? Gross profit is income minus expenses, but doesn’t take into account overhead.
2:25 What are the downsides to flat fee bidding? There are no clear and objective parameters to what done is, so the job can go sideways quickly.
3:45 How does an overage or change order work? It’s an estimate for work that falls out of scope.
5:10 Why are creative clients the most difficult to work with?
6:10 What are musicians the exception to the working with artists rule? Chris explains with the Raveonettes and Coldplay.
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Credits:
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Host– Chris Do
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Typefaces: Futura, Din
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