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How many billable hours should it take to edit a project?
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[Benjamin Reichman] “how many hours should I estimate? Is there a rule of thumb I should use?”
Tell them how much it will cost for you to complete the final project. Once you open the door to hourly charges you run the risk of nickel and diming which is not fair on either party.
If you know your client, and you know what kind of footage you have and what the project scope is, then estimate the hours it will take you, calculate your rate based upon your actual labor costs, and add the factors you always take into account (overhead, profit, cost of materials) and come up with a price.
Let’s say you think it will take:
100 hours x $50/hour labor = $5,000 + profit (labor x X%) + overhead (labor x X% (a percentage of your annual costs for overhead)) + cost of materials (tapes, hard drives, batteries, gaffer tape, stock music, etc) and that is your minimum selling price.
You give the client the price, perhaps broken down into the different milestones as a logical percentage of the whole, but not the number of hours.
Then if the scope changes beyond what is in your statement of work, you can have a clause in your contract about charging more, say in 5% increments per mutual agreement. For example, you deliver the final DVD and the client says “oh, can you also make me some files to play on my iPad” – that maybe was not in your SOW so you can say “sure, but that was not in my SOW so I will charge you 5% of the agreed upon amount to do that for you – or whatever.
Once you get into hourly charges you are a plumber, but installing a garbage disposal is likely to never take more than 2 hours. If the plumber told you it would take about 2 hours, then, due to the odd configuration of your kitchen sink and limited space under the counter it took 11 hours, you would be upset and likely fight the charges. Rather, if your plumber said “I am a great plumber and I will install the disposal for $500 no matter how long it takes (this assumes the plumber has inspected your sink configuration and knows it might be quick but it might not, so he comes up with a price that is fair to both of you. And you likely know that your sink if oddly configured and might take extra work, so knowing the plumber’s hourly rate posted on his website, you agree that the fixed price may actually be cheaper but that it is more than the price quoted at Home Depot for the same job. etc)
Mike Cohen
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[Mike Cohen] “Then if the scope changes beyond what is in your statement of work, you can have a clause in your contract about charging more, say in 5% increments per mutual agreement. For example, you deliver the final DVD and the client says “oh, can you also make me some files to play on my iPad” – that maybe was not in your SOW so you can say “sure, but that was not in my SOW so I will charge you 5% of the agreed upon amount to do that for you – or whatever.”
Maybe you’re personal experience is different but even with that wording some clients (clients I’ve had) assume a rate is flat if you don’t mention hours. You certainly don’t have to report the clock but they need to know the time is hard defined. Believe me, I’ve had clients start piling on small things for the deliverables. Often times I’ll just toss in a quick encode if it’s small and only takes me a few minutes. Even if I make that clear they may not “get” it. I had one client who then started asking me to export still for their calendar (lots of stills) and I did ask them to pay for it as it was CLEARLY out of SOW which was written and signed by both parties. They resented the charge.
I’ve found that if the job is defined as 100 hours, when I deliver I tell them I went a little over for one little thing or another but I’m not billing them for it, they are far less likely to start asking for that “one more thing” without understanding I’ve already done extra for them. Again this has been my experience and obviously your clients are different.
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[Craig Seeman] “Maybe you’re personal experience is different but even with that wording some clients (clients I’ve had) assume a rate is flat if you don’t mention hours.”
Of course every experience is different, and we all have our particular way of working.
I think one thing is clear from this and many other threads like it – film schools are not teaching film students much about how to actually operate in a business setting. I have seen this in numerous film school grads – they learn all the technical skills, but then if they want to go into business for themselves, they are dead in the water unless they find a good mentor to teach them the business side of things.
Mike
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True and good points. However, back to the hourly/per project thing…
My experience says that a per project pricing is the way to go when a client is giving you a well-defined project. It makes them happy, and if you kick butt it will make you happier. It does indeed keep one from being a plumber.
However, sometimes you get dealt a mess, and if they’re a good client you need to help them out even if you’d normally run screaming. If a client is, as in this case, relying on us to be their ad agency, video production company, post house, and so forth and proceeding without a script then not going hourly is a suicide mission.
I will say that even in a case where you go hourly, it’s nice to be able to tell the client a rough idea of the total cost of the project, of course.
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http://www.patrickortman.com
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I absolutely agree! I thing some basic small business education should be part of any good media curriculum. I suspect they’re still thinking that most people will go work for some company rather than having to start their own small business or go freelance.
I remember back in college (I’m probably about Bob Zelln’s age) I was told by a wise instructor that in this business you may go through many jobs but you may never stay unemployed for very long. I don’t think he was at all misleading for the time. In fact he was good to dispel the notion of “job security” in this industry (and he was currently working in the industry and teaching at two colleges were his part time gigs).
The problem is that thinking, if it exists at all in media education departments, hasn’t changed. Kids get out and find no entry level positions. They fend for themselves and do so by undercharging and while some may have no practical training others are quite talented. Both set in place a series of “bad business” expectations from potential clients. Personally I think that is the greater harm rather than the superficial issue of “underpricing.”
The result of that is an increase in:
Clients expecting flat fee pricing rather than flat budget.
Payment after delivery . . . not just final but complete payment.
That a job poorly done by one can be fixed by an eager to work replacement.
This is in addition to the pricing issue itself.
This is why It’s important how we do estimates because what an estimate means today is not what it meant 10 or 20 years ago.BTW this is why I simply don’t state “one week at x $”
One week of 40 or so work hours is very different than one week you own me rate. IMHO and personal experience many clients are now assuming it’s the “I own you rate.” Too many clients will contact at 5 or 6PM with revisions and think they’ve got you for the rest of the night as well for tomorrow delivery. You have to make boundaries clear to the client. They often discern days as 16 to 24 hours rather than 8 to 10 hours. This has been when they’ve gotten from the kids out of school. Of course clients who’d never consider hiring someone that inexperienced may not have that notion and maybe that’s why some of use need to define the boundaries more precisely than others. -
[Patrick Ortman] “However, sometimes you get dealt a mess, and if they’re a good client you need to help them out even if you’d normally run screaming. If a client is, as in this case, relying on us to be their ad agency, video production company, post house, and so forth and proceeding without a script then not going hourly is a suicide mission. “
Yes Patrick. And I’m finding this becoming more common these days. As per the story I posted it’s even possible that a client with significant experience in one area has made internal changes with new people in another area so even a client with a good history in the biz may be complete newbies (including the personal in the specific division/endeavor) in the job they handed you. Sometimes they sound like they’re very prepared but it’s only because they know what they’ve been taught to mouth from others in the company.
Actually I don’t mind if the client is relying on me for everything as long as they’re upfront about it. In fact one of the very strong selling points is our experience. We might be priced a bit higher but we are your Rock of Gibraltar and this is one of the “value added” points to give to the nervous newbie client whose own reputation and job is on the line. This is a KEY to selling/marketing in the new economy.
They key is to show them how that experience will bring in the job on time and on budget and they will accept your boundaries because you’ve persuaded them you can deliver within those boundaries.
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The rule of thumb is as long as it takes or whatever their budget allows. Some ten munute pieces are talking head with cuts only of b-roll and some are 20 layers deep with graphics, animations and sweet sound design. This is why folks pay by the hour. Should they have tweeks… it’s on the clock. Should they want to discuss each edit… it pays a lot of bills. Sometimes a client just wants to talk about their day. You’ll find a big part of your job is just being a good listener.
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