How to Price a Job
This morning I hear from one of my coaching clients who told said “I am working on a big job right now and I’m trying to figure out how to price it. These are clients I have worked with before on many projects, and they are actually my very best dream clients.
I would like to offer them three-tiered pricing but I haven’t done that with them yet. In the past, I billed them for my hours and product cost plus, 20% and it worked fine. I have asked my bookkeeper to pull up one of their old jobs so we could find out what the hours and product total were so I would have some information before I just blurt out a number.”
She added, “I believe that I can do this with my client – I was billing him a flat fee of $1,000 per day, although I have not figured out how many hours it will take. Once I get the number back from the bookkeeper I can better gauge the time. I have already made two trips to the job site, plus a lot of hours on research and background work. Should I switch over to a fee? How do I figure this out?
Answer: Sometimes if it works, and if it does... don’t fix it. But having said that… what “works” means that you are REALLY GOOD at tracking time and billing ALL of your time to your client without reducing or editing your timesheet. If time billing has never been an issue with this client you can leave it be. I would, however, ask for a retainer so that you are not always paid 30 to 60 days behind the completed work.
It’s a fact that most designers are not consistent or accurate about posting their design time, and often cheat themselves out of a good paycheck on a regular basis. If this sounds like you, and you are not billing ALL of your time, you are better off using a fee based agreement, with a clearly defined scope of work.
To figure out how much this fee should be, take a peek at my Project Time Estimating System at http://www.designbizblueprint.com/education-tools/project-time-estimating. It’s an easy to use spreadsheet program that let you post your estimated hours for all the tasks, and then it adds your rate at the end. The Project Time Estimating System will also calculate your fee, and then you can figure out how to make good, better, and best offers from that fee. Finally, create and present the Letter of Agreement NOW before you invest any more time in this job.
Terri Taylor, IDS Professional, ASID, IIDA, IFDA, is President and Creative Director of Taylor Design Group and Design Biz Blueprint. She is a frequent speaker and guest lecturer at design conferences and interior design colleges throughout the country. She speaks on a number of topics related to the business of interior design, including: business practices, sales, marketing, motivation, leadership, success and personal growth.
Ms. Taylor is nationally known as an interior design business expert and coach who teaches and mentors interior designers to help them create successful design businesses.