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The value of time

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Fernando Mol
The value of time
on Feb 25, 2009 at 9:08:51 pm

Hi

I have this good client, but a little difficult with delivery times. I always gave them a production calendar in every budget. 3 to 4 weeks, usually. This time they are asking me for a last minute video and they need full production in a week.

I'm thinking in charging a little extra for the short time delivery.

What's the best way to manage this? I'm thinking to write it on the budget as "extra hours to accomplish delivery time". I'm used to work late night and in weekends, but I don't like to if I can avoid it. This little video is going to be difficult because I have some other projects in the run.

Also, I know this client is not used to pay extra charges to nobody, because urgency is the word of the day and they assume people should understand.

What can be the best practice? Be perceived as "You can count on me" or as "You can count on me but you'll have to pay".

I'm thinking in something like a 25% extra charge.



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cowcowcowcowcow
Mark Suszko
Re: The value of time
on Feb 25, 2009 at 9:15:59 pm

Absolutely, there is an extra charge for rush/emergency orders or orders outside of normal business hours. How much is up to you. I think your only real trouble is, these terms really need to be explained to the client before the work begins. When done after the fact, they universally begin to suspect the worst of you.

Me, I know that plumbers charge more for weekend housecalls for a reason. So I never start a DIY home plumbing job on a Friday night:-)

Think about who is training whom here: are they grinders trying to train you into giving up ever more work for the same set fee? OR should you be training them that things cost what they cost, and to get more, you pay more. If the former, you won't stay in business long.


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Michael Hancock
Re: The value of time
on Feb 25, 2009 at 9:16:06 pm

Call it a "rush charge". If they ask what it is, explain that a normal work week is 40 - 50 hours, but this week you'll be working 75+ (or however many hours you'll work) to meet their "rush" deadline. So you're billing time and a half over the normal work week hours.

Don't be surprised if they pitch a fit though. Especially if you've done a lot of rush jobs in the past for them without the extra charge.

Michael



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Mike Cohen
Re: The value of time
on Feb 25, 2009 at 10:15:55 pm

Your time is valuable - not just because of the fine quality work that you do, but because in the course of a normal week without any rush jobs, you can work on multiple projects and bill multiple clients.
A rush job entails stopping planned work on other clients' projects, thus potentially putting other projects behind, or causing you to work extra hours to compensate. Thus, a rush job absolutely deserves a higher rate or "rush" fee to cover your overhead.

For any urgent matter, get a piece of paper. Make four boxes:

Urgent Non-Urgent
------------------------
Important | | |
| | |
|_________|_____________|
| | |
Non-Important| | |
| | |
|_________|_____________|

Decide where to put the "urgent" matter and this will determine how much effort you need to put into it.



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Jay Curtis
Re: The value of time
on Feb 25, 2009 at 10:27:45 pm

I learned from a friend the best way to deal with clients like this, even if you've been doing these rush jobs in the past without charging extra.

My friend's policy was to avoid saying no to a client if there was a way around it. Mind you, he also knew how to keep from getting stepped on by grinders, too.

If he had other projects in the works, the answer went something like, "Wow, we're really booked up right now. We had everything planned out for your project to be ready on _______. I'm not sure we can get it as soon as you need it without some overtime."
Client: "How much is that?"
"Time and a half our hourly rate."
"Oh. Uh... maybe the original date will be OK."

Right.


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Richard Herd
Re: The value of time
on Feb 25, 2009 at 10:37:56 pm

Here is a contract I found useful. http://aicp.com/doingbusiness/scpa.html

Section D. is the terms of payment:
% Due upon signing of contract
% Due upon approval of photography
% Due upon completion of delivery



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cowcowcowcowcow
Franklin McMahon
Re: The value of time
on Feb 26, 2009 at 2:06:17 pm


Yes rush jobs should incur an extra fee. Is always best to provide a choice, such as, I can get it done on Monday for XXX or I can have it done Saturday by 5 for XXXX. That way the company can choose how important it is. If they are like, whoa, I have not paid extra before, you can pin the blame on other clients rush jobs. Inferring that you are getting more rush jobs lately and because of "them" you had to come up with a system.

When you don't compensate yourself for rush and extra work you eat into your profits without even knowing it. Like a convenience store where a customer buys something and then says, well can I grab a second one for free? The store will quickly see its profits dive even though it may be busier than ever.

You also have to be willing to lose a client. Its the most pivotal point in building a successful career. A client may just have to go elsewhere. Once you are comfy with playing hardball and not backing down, and it may take losing a client or two, you move from a large mix of grinders in your client-base to attracting the cream of the crop. You also go from being bleary-eyed working all night for tons of hours to working a lot less, charging more and having a better breed of clients.




___________________________


Franklin McMahon / Host

CreativeCow.net PODCAST


Creative Cow Podcast Page /

Creative Cow Podcast in iTunes /

FranklinMcMahon.com



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Bruce Bennett
Re: The value of time
on Feb 26, 2009 at 4:59:00 pm

[Fernando Mol] "I have this good client, but a little difficult with delivery times. I always gave them a production calendar in every budget. 3 to 4 weeks, usually. This time they are asking me for a last minute video and they need full production in a week.

I'm thinking in charging a little extra for the short time delivery."


Hi Fernando,

As a good client to the vast majority of my vendors, I too try to give 3-4 weeks for post production. I partly define "a good client" as one that pays on time, consistently patronizes the vendor and is understanding with schedules. But...

If I were to take a project with a 1-week turnaround (which to me is not too bad of a post production time period for a smaller project) to one of my post vendors, and they charged me a rush charge, I would (and have been) reluctant to bring such "quick turnaround" projects to them in the future. If I've spent thousands upon thousands of dollars with a vendor throughout my career, I would hope that I have some kind of "special treatment" when it comes to such things. Likewise, I extend my beliefs and practices to my own clients.

You must be doing very well to contemplate such a charge in this recession.

Just my thoughts.

Bruce

Bruce Bennett
Bennett Marketing & Media Production, LLC


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Rob Jackson
Re: The value of time
on Feb 26, 2009 at 5:59:00 pm

Slight tangent here based on Bruce's last comment "You must be doing very well to contemplate such a charge in this recession."

From what I've seen, one of the quickest ways to dig yourself into a hole is to lower your standards during this recession. Yes, it may help retain clients, and a lot of us would rather take some work than no work, but consider this: If you lower your rates or start not charging for rush work now, when the recession ends, it will be exponentially more difficult to raise your rates and start adding charges. Clients will remember your lowest rates and be reluctant to go with higher invoices if they know you're "willing" to work for less.

I'm not an economy expert, I haven't owned a business during a recession before, and perhaps in this business that idea of thinking is way off. However, I know of many large corporations and small businesses alike that are trying to keep their prices as steady as possible specifically so they don't have problems in the future. If you have to lower your rates, try and make it in the form of a one-time "special promotion discount" or something similar.

Fernando. Charge a rush fee. If they balk, perhaps compromise with 2-3 weeks instead of 3-4. Your time is worth it. If they are a consistently great client, like Bruce mentioned, then perhaps giving them a break now and again is a good thing, as long as it doesn't hurt the other clients who have deadlines looming.


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Fernando Mol
Re: The value of time
on Feb 26, 2009 at 7:29:28 pm

Thank you all for your great feedback.

I sent the budget to my client with an extra charge for "short calendar".

They don't really have money for the project, but they didn't ask me to low my prices, instead, they reevaluated their needs and the video will be shorter. Now I need to re-budget the project and of course is going to be less money, but not because my work is cheaper, it's because it will be done in less time.

And, of course, I'll still include the little extra charge.



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Bruce Bennett
Re: The value of time
on Feb 26, 2009 at 7:44:17 pm

Hi Rob,

Thanks for the feedback on my post. Hopefully I can make myself a little more clear...

[Rob Jackson] "From what I've seen, one of the quickest ways to dig yourself into a hole is to lower your standards during this recession."

From what he says, his company has no "standard rush charges" in place and thus his post asking for advice.


[Rob Jackson] "If you lower your rates or start not charging for rush work now, when the recession ends, it will be exponentially more difficult to raise your rates and start adding charges."

Two entirely different things. Lowering rates is not the same as adding on rush charges. Also, I find that almost 100% of my clients do not care what my rates are. They care if I can do what the want (or more than what they want) for the total sum of money budgeted for the project. If paying rush charges falls in line with the budget, so be it. If it ends up increasing the entire budget, then it may have to go through corporate channels to get it approved (along with the newly added risk of the project being canceled because of going over budget).


[Rob Jackson] "If you have to lower your rates, try and make it in the form of a one-time "special promotion discount" or something similar."

Again, lowering rates and adding rush charges are two entirely different things.


[Rob Jackson] "Charge a rush fee. If they balk, perhaps compromise with 2-3 weeks instead of 3-4."

Highly doubtful. The vast majority of my experiences with this are that the client's usual way of balking is not awarding you project and taking it somewhere else (without telling you). Most of the time, there are no second chances to re-bid, adding value added services, or negotiating due dates after the first attempt/bid/estimate fails to get the project.

Cheers!
Bruce

Bruce Bennett
Bennett Marketing & Media Production, LLC


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Chris Blair
Re: The value of time
on Feb 27, 2009 at 3:53:38 am

When we have clients question charges or line-items they think are high, we typically just roll them into a different, less scrutinized line item on the estimate.

Example: when everyone started moving away from doing VHS and DVD's and began sending digital files for project review and approval, we had clients complain when we charged them for encoding a file and emailing it. We were charging the exact same price we charged for VHS or DVD copies, but in their mind, we were doing less work. In reality, it took us about the same amount of time to encode, check the digital file, type up an email and send it...or upload to FTP.

Rather than try to explain this or fight with them, we just charge a 1/4 hour extra editing per encode. We make the same amount of money and nobody complains.

Same with rush projects. We just add hours to the shooting or editing time (unless it's a weekend shoot, where we charge time and a half). The client doesn't see anything called "rush charges," but we still bill for it.

Problem solved.



Chris Blair
Magnetic Image, Inc.
Evansville, IN
http://www.videomi.com


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Michael Hancock
Re: The value of time
on Feb 27, 2009 at 4:37:25 am

[Chris Blair] "Rather than try to explain this or fight with them, we just charge a 1/4 hour extra editing per encode. We make the same amount of money and nobody complains."

This is exactly what we did when we started delivering via FTP. We took our hourly rate, divided it by what we charged for a dub, and add that as edit time for every file we upload.

Plus, it solves the hassle of billing sales tax for a Beta dub because we're no longer delivering a tangible product. Instead we're providing an extra service, which isn't taxable. Win-win for both parties.

Michael



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