Lately, I have been considering an attempt at nailing down my fees and how I present them to a customer.
I DO request 50% down and get it "most" of the time. There are a few that I know and trust and have not had problems with.
Anyway, I've been reading some of the older info on this topic and have stumbled.
In the end, the customer has a new sign. The sign costs X dollars. I get half of X dollars as a deposit. I get the other half of X dollars when he picks up the sign. I have made 100% of X dollars that I have charged the customer.
If the customer needed a logo designed or some kind of special artwork on that sign, I should have charged him a "sketch" or "design" fee. I read where some of you are getting a hefty chunk of change for "Ad Agency" work. How exactly does this work?
Say the customer needs a design. Say I charge $100.00 for a design, a sketch, a concept idea... Do I get 100% of that fee up front or 50%? Is this always in addition to the completed sign or do you deduct it or a percentage of the fee if the customer goes with your design? Perhaps in writing this I am answering my own question but maybe you charge the fee no matter what like a set up fee or something?
Another thought - I was reading some posts that talked about design use. One stated something like "the customer has the right to a one time use" for the design. Meaning that when that customer wants to take it somewhere else to reproduce it on a business card or embroider it, you charge him some dollars to put the thing on a CD. Then there's the question of why that guy can't just take it to any other place and have it reworked. In this case, you will get no more than what you charge to put it on a CD. I don't know how it would work, but you know how you can download "demo" programs that have an expiration date? Why couldn't something like that be used on a CD that you supply to your customer... this way he has to come back to you for "another fix".
Sorry I am rambling on, I'm just trying to clean up my own act a little bit.
Thanks.
-------------------- Jeff Vrstal Main Street Signs 157 E. Main Street Evansville, WI 53536 1-608-882-0322 Posts: 670 | From: Evansville, Wisconsin | Registered: Sep 2001
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Jeff, When a customer comes in (especially with a new business), and starts suggesting that they may want the same or similar design on different items (sign, truck, business cards, etc.), I immediately switch gears and start talking to them about logo design. This may not be specific to your question - I apologize if not. When we do a logo design, the customer automatically gets the design in several file formats on CD (after approval). Then it belongs to them. I'm probably way too cheap at $150, especially with the 'extras' they get, but we're not in a 'big money' market (small town, rural America). For a sign job only, we usually try to determine up-front if there will be a lot of time involved in the design. If so, I'll charge separately for the design, and call it an 'artwork'fee. Not a perfect system, just the way we do it here. Thing is, decide what you'll charge, and don't stutter when you say it. Then the customer is less likely to try and 'barter'. My two cents. John
-------------------- John Stagner Action Graphics Salem, MO agraphics02@earthlink.net Posts: 98 | From: Salem, Missouri | Registered: Aug 2003
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John, thanks. Yes that's the kind of stuffm I'm looking for and you explained your version pretty well. I know that there are others out there that are also trying to "upgrade" so I would welcome any other thoughts on this topic.
Thanks!
-------------------- Jeff Vrstal Main Street Signs 157 E. Main Street Evansville, WI 53536 1-608-882-0322 Posts: 670 | From: Evansville, Wisconsin | Registered: Sep 2001
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For me, design and production are two different functions. I charge a design fee if the project is more complex than just picking a font and messing with it a bit. Sometimes a generic need gets a generic response. For instance, I don't charge a "design fee" to do a parking lot sign (even if its a nice one).
When I design a logo for a customer, I'm probably going to be spending more than 15 or 20 minutes on it. I'm likely to spend 30 minutes talking with them about their business, and getting a feel for what they want to communicate. Then the design work starts.
My minimum design fee is $150, but I usually charge $250 for a basic logo (1 or 2 colors, simple type treatment). (I have done more complex jobs for up to $500. Beyond that, its agency work, and I'm not really THAT good, so I refer them.)
Included in the design fee is unlimited usage. That means they can use the design in any way they want, on cards, signs, advertising, etc. I email them an EPS file that they can use. (I also offer to handle the design of business cards, etc. That generates an additional fee to lay out the business card and then the markup on the printing).
The only time a customer would NOT get unlimited usage is if I only charged them for actual design time, because they only requested a simple sign or promotional banner. I put in 30 minutes tweaking some cartoon I sketeched, and I drop it onto the piece. Then they come back and want to use the same graphics in another way. For that I might charge them an additional use fee.
When I worked for design studios, a logo design package would routinely cost $20,000. This is not an unusual amount, and the charge could easily be three times that.
A one-man tow truck company isn't a 150 person Internet routing company though, and so the tow truck guy doesn't really NEED the work that goes into a $20K logo. (Three designers working full time for a week, generating hundreds of designs, having lots of meetings, and perhaps doing market research. THAT's what you get for $20K.)
-------------------- :: Scooter Marriner :: :: Coyote Signs :: :: Oakland, CA :: :: still a beginner :: :: Posts: 1356 | From: Oakland (and San Francisco) | Registered: Mar 2001
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I agree with you on having it be two entirely different functions & costs. Jeff & I had a great conversation last night on the subject and I think you hit the nail on the head.
Great talking with you Jeff. Now lets get some more thoughts on the subject folks.
-------------------- Brian Diver PDQ Signs Everett, Wa
We are doing the same thing. I had a shop policy on the door which stated the minimum charge for services and that design deposits are required up front. Its sort of working, but I am going to revamp the whole order system.
MY biz coach told me there has to be a very organized proceedure from the time the customer enters the shop to taking the order to producing the work so that everyone gets what they want. It has to be a win-win situation. I want paid, they want a sign. They have to pay at some point, it might as well be in advance!
So I am making a step by step "how to order a sign" sign the size of a sheet of typing paper that the customer has (forced) to read. It will sit on the counter and I will go over the steps up front with them so they understand the proceedure. If they don't like it, they can take a hike out the door.
It sort of goes like this:
-------------------------
SHOP POLICY: MINIMUM ORDER $85.00*
STANDARD SIGN WORK: signs that do not require a sketch or design as i.e. boat lettering, no parking signs, etc.:
Step 1. Fill out the Standard Sign Order form and sign it. Step 2. Choose substrates and available lettering ( vinyl, painted, plastic, etc. Step 3. Choose available payment method: Charge card, Approved Company Purchase Order, Approved check, CASH is fine! Step 4. Pick up sign when ready. ---------------
CUSTOM SIGNS are unique and first require a color elevation or design sketch.
Step 1. Fill out the DESIGN WORK ORDER and sign.
Step 2. Choose available payment methods, minimum design fee is $85.00 for first rendition.
When the sketch is ready:
Step 3. Review design and work order production form stating cost of sign work. Make changes if needed. Changes will result in additional charges.
Step 4. Sign work order production form, and choose available payment method.
Step 5. Pick up sign when ready.
*note: Minium shop fees do do apply to repeating clients. They are billed monthly for frequent or repeating orders. =====================================
This is a rough draft of what we are indtending to do to prevent our designs from ending up in another sign shop.
I don't mind if my design ends up in another sign shop as long as I was paid for the design. This proceedure will make sure I get paid for my design work.
[ August 30, 2003, 04:30 PM: Message edited by: Dave Draper ]
Scooter, thanks - I agree with some of those thoughts. I do think that I won't probably charge the same amounts that a design firm might get, i.e. the tow truck driver situation. Reading some of your past posts on this topic got me thinking about this again.
Dave, hey, this is where I am trying to go. Thanks for sharing. I know that there are people out here in THIS business(ME)that really need to bone up on this idea. My goal is to take a look at this in a serious and realistic manner, to understand what I am doing, what I need to charge for, when to charge for it and why - without coming off like a complete hard case. I want to come off as a "professional" in the business community and improve my overall bottom line.
If in the mean time it weeds out some of the tire kickers and price shoppers, so be it.
And Brian, Yes, good conversation indeed. It's ALWAYS nice to get a call out of the blue and talk to someone who is in the same boat!
One of the things that Brian and I touched on last night was the idea that there could possibly be different standards for "home based" operators as opposed to those of us that are "store front".
I guess that I would hope that there is not a difference. Of course, overhead costs might not be the same but in the end we all want to deliver a similar quality product that serves a similar quality purpose. I think that the business standards should be the same. What the standards ARE and how they are conveyed to the customer is what I am trying to nail down.
Thanks again!
-------------------- Jeff Vrstal Main Street Signs 157 E. Main Street Evansville, WI 53536 1-608-882-0322 Posts: 670 | From: Evansville, Wisconsin | Registered: Sep 2001
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Jeffrey, We all (or most) need to revise and stipulate a 'Company Policy' at the onset of any customer's request for our services. Looking back I'm sure we have all gotten burned by misunderstandings on artwork fees and who has the right to use them after the job has gone out the door.
I have a few 'policies' printed and framed starting at our front office through the shop into our design studio, with some repeated at more than one place.
The one that I predominantly post is "Estimates are FREE,,, sketches ARE NOT" this lets the client know immediately that they will not get a session of 'free' ideas.
"50% deposit required on all orders, no layouts or artwork will be started until a design deposit has been made"
The next one sits on top of each design station "All computer time billed at $65 per hour. The design/art charge for your project includes an ample amount of time for any necessary edits or changes that may need to be made. All other time spent at the customers request for trying different colors, fonts, shapes, ideas and concepts is considered extra billable time.
I have had much less hassle with clients wanting 'something for nothing' since posting these policies a couple years ago. We have had a recent shop rate increase based on the fact that we put in a lot more time than we actually get paid for (as in most shops). I based the increase on the governments COL (cost of living) increases (although Bush may eliminate it for Fed employees this year). Going back to 1984 when I attended my first Letterhead meet I came home and doubled my shop rate to a comfortable $35 per hour and finally started making enough money to allow the business to profit and grow. I was afraid I would lose most of my clients by doubling my rates but I only lost a few (the ones that complained about prices already, good riddance!) Regretfully I did not keep up with the COL over the years and even after a few spontaneous increases I found out last year that I was several years behind in what I should be charging. So, I made a chart with the average 3% annual increase since 1984 and immediately found that I was $15 per hour too low. My wife and I both have to make a living out of this business, her 'secretarial' time is included in the $65 per hr. but any of her production time for weeding, prepping, coating is billed at another $25 per hr.
We all have friends that have good factory or corporate jobs with benefits and decent pay and they go home and leave all the problems to the owners, us as the owners of our own small businesses need to be paid at least as well or better for our efforts. Being able to 'lock' the door and go fishin' is not all that finacially rewarding, especially if we're working Holidays and weekends to make up for taking a day off.
Guess I got sidetracked a bit, but just some extra ammo for you to consider when setting up your policies,,, you may want do a rate inspection to see where you're at on the pay scale.
-------------------- Larry
Elliott Design McLemoresville, Tn.
If you can't find the time to do it right, where you gonna find the time to do it over? Posts: 486 | From: McLemoresville, TN. USA | Registered: Nov 1998
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