Client abusing our quote?

[Walter Biscardi]

It all goes back to your contract and what the stated deliverables are. If they are going outside the scope of the contract, then you notify them of this and what the additional charges are. If there is no set contract or no specific language on what your deliverables are, then you’re basically screwed and have to deliver what they are asking for.

One big problem I see in all of this. You lowered your price for a division in the same company that you do work for already. Anyone else that requests work is going to want those same prices because everyone will know what this new person paid for. Never, ever lower your prices for different divisions in the same company.

Walter Biscardi, Jr.
Editor, Colorist, Director, Writer, Consultant, Author.
Credits include multiple Emmy, Telly, Aurora and Peabody Awards.
Owner, Biscardi Creative Media featuring HD Post
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[David Rodney]

Walter, some good advice there, thank you. I didn’t think of the possible repercussions until after it was done and this was a real “doh” moment, if ever there was one. But it was done quite innocently as I felt we weren’t going to get the work unless we worked in with the budget. And, honestly, the way the job was originally outlined, the money we were getting was adequate.

The real problem here, I guess, is that there is no official “agreement” as to what they get for the money.

I am not convinced this has painted us into a corner as far as charging the company in the future goes, however, because as far as future quotes go, if anyone brings up this cheaper price, we will explain that it should have been for a basic shoot and edit only.

The question is now, though: should I approach the contact and let him know that we agreed to fit in with their budget because the outline was a straight-forward shoot and edit, or will this make us look unprofessional enough for them not to use us again?

Thanks again.

David

[Bruce Bennett]

Hi David,

No matter what you do, be sure your final invoice has a line item with the description, “Discount courtesy of (insert company name here because it is not in COW profile)” with the price/money lost on the project. QuickBooks and Peachtree, as well as most other invoicing/accounting software, has a “Discount” item/inventory part.

When you email or mail the invoice, write a little note saying something like, “Glad to help out with your budget for this first project.” I would stick to pricing the next time.

Good Luck,
Bruce

Bruce Bennett
Bennett Marketing & Media Production, LLC
Creative Inspiration
Documentaries for those who love to create … and to be inspired.

[David Rodney]

Thanks Bruce. Good idea.

In regards to quoting, I would be interested in what methods other production companies use to quote.

To me, it has been one of the most difficult things for the company to master.

Most clients I have dealt with have never been able to detail the job enough to give a firm/correct quote…and all we have really done is gone off previous jobs as a guide.

Are there certain software packages you can use to quote (specifically for video production) and are there generic contracts/forms that you can forward to the client for them to fill out so you know exactly what they want out of a job and if there is an argument later, you can refer to their request?

Thanks so much,

David

[Mike Cohen]

1. Know how much you need to earn to fill your three buckets: overhead, costs of goods and profit.

2. Know your client. Some clients want a project price and the end product, others want a detailed hour by hour summary of what you will do and then a report at the end of what you actually did, and either a pro-rated final invoice or a refund.

This can also apply to how you write your itemized list of deliverables, and is impacted by how you run your business. For example, do you write:

Video shoot, 2 cameras, 2 guys, lighting, audio: $1500

or

Video Shoot, 2 cameras: $500
2 camera operators: $500
Lighting: $100
Audio: $50
Tapes: $50
Consumables: $100

etc

If you are a day-to-day work for hire outfit, like a owner-operator of a production kit, then you may use the 2nd option.
If you charge by the project, you probably use option 1, and your client could probably give a hoot about what the video shoot charge contains on an itemized basis. But they might. Know your client.

3. Knowing what you know about every type of project, either from past experience or from your gut, build in enough hours to cover the work. Anticipate the unanticipated extra work. There is almost always unanticipated work. As described in many past threads, corporate clients are flying by the seat of their pants, and may not consider last minute changes to be a big deal. Build this contingency into your price, so it is not a big deal for you either.

4. Charge a project management fee. This covers your time doing things that are not editing, shooting or rendering. For example, scheduling, travel time (not travel costs, those are billed at cost), quality control, burning discs or backing up files. This can also cover you for overages. Take a fair percentage of the total estimated charges and add that to the final total.

In summary – don’t be surprised if there are surprises. What sounds simple to you, and simple to them, may turn out to be slightly less than simple: aka “simple-plus.” Assume that simple will be simple-plus, so when it happens it is not a shock, and you can focus on the job.

Of course following these suggestions may reduce the traffic on this forum!

Mike Cohen

[Mike Cohen]

in addition to my above post – you may quote differently for different line items:

Editing – 1st edit through final $1000
(up to 40 hours)
or

Editing
1st edit – 10 hours @ $25/hr = $250
2nd edit – 10 hours @ $25/hr = $250
Final Edit – 20 hours @ $25/hr = $500

If you do option 1, just one price for editing, make sure it is a number you can live with if things go to 10 edit versions.

You may, or may not, want to include a clause saying “editing time beyond X hours will be billed at $25/hr in the final invoice”

A client may want this clause modified to add “Vendor certifies that total cost will not exceed X% of the total estimated charges.”

Know your client, know thyself. Find a way to keep both parties satisfied both with the work and with the cost, and avoid emergencies, by anticipating emergencies, so that they are non-mergencies.

Mike

[Bruce Bennett]

For the past 17 years, I have used Microsoft Excel to estimate projects. One page for actual estimated hours, units, markups and costs. The second page with “summed line items” for the client submitted as a PDF (i.e., Page 1 = 32 hours of post at $100/hr. and Page 2 = Post Production, 1ea., $3,200.00).

Bruce

Bruce Bennett
Bennett Marketing & Media Production, LLC
Creative Inspiration
Documentaries for those who love to create … and to be inspired.

[David Rodney]

Thanks Mike.

I seem to be filling a niche where large corporates want to do “throw-away” videos for their intranets but do not want to pay advertising-agency-related rates, yet still want an acceptable job. A lot of the time, the client cannot be bothered with the complexities of advertising agency protocols for the most simplest of videos – videos that might have an expiry date one week or one month after their production – so they use me to produce something well, but cheaply…the option is not to get them done at all.

So, what this means is – they come to me with a budget: “this is all we want to pay for this job” and you either do it or quote so high that they choose not to do it…and risk losing future work.

The way this client organises things, there is NO WAY they would be able to look over agreements (or want to, for that matter) for such simple, throw-away videos. If it became complex, they just wouldn’t do it.

I have heard they use me because I make things simple for them and do a good job that suits their needs. I just get the job done without a fuss and don’t charge the earth.

Just gotta make sure I don’t get cornered in the future…

Have learned a valuable lesson here this week.

[Bruce Bennett]

[David See] “So, what this means is – they come to me with a budget: “this is all we want to pay for this job” and you either do it or quote so high that they choose not to do it…and risk losing future work.”

You establish your rates based on what YOU need to make in order to stay in business. Even though you say your competitor is charging “too much” they are probably estimating based on this principle. If your fairly estimated price is seen as too high by the client, yes, you risk losing future work. If you play the game “How much money do you got and I’ll do it for that” you won’t be in businesses very long or you will be working 24×7 in order to stay in business.

Bruce

Bruce Bennett
Bennett Marketing & Media Production, LLC
Creative Inspiration
Documentaries for those who love to create … and to be inspired.

[Mike Cohen]

Since a lot of folks read this forum who are, perhaps, just starting out in business, often for themselves as sole proprietor, I think this point is one to focus on again.

Remember that you need to earn a living, not just get by. X dollars for a quick project may seem like a good idea, but make sure you are actually getting something out of it, not just breaking even. If you do a lot of work like this, you may do ok at the end of the year, but break even sometimes or lose money other times. If this works out for you, and you hopefully are looking at the future on a regular basis, you might be ok. But if you make a habit out of losing your shirt, you are going to be walking around without a shirt a lot.

For every unit of money you earn, divide by 3.

.33 goes towards your bank account (profit)
.33 goes to your cost of doing business, which for a one-man or one-woman shop is basically your salary
.33 goes to overhead, which is rent, utilities, phone, website, blank tapes etc.

If you are in business for yourself, you should be tracking all your expenses in Excel, Quickbooks or whatever, so you know what your salary, your Overhead are and your profit is whatever is left over. So it may not be .33/.33/.33, but whatever proportions you follow, make sure these are accounted for in how you charge.

My dad always used to say, “Pay yourself first.” Actually he still says that.

Mike