SECRETS FOR ESTIMATING SUCCESS
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PROS & CONS
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Showing Hours on Estimates
SHOW clients
hours because:
Showing estimated hours promotes an open, trusting relationship
with clients. After all, you're not hiding anything. You're providing
them with a complete picture of the work you're doing, which
can prevent embarrassing (and potentially client-losing) surprises.
It holds your agency to a higher level of accountability. But
if the hours go over, what do you do? (Answer: A change order!)
DON'T show client hours because:
Clients can easily calculate your hourly
rates. It's a simple calculation for a client
to figure out the billing rate per hour for
a task that they feel is unreasonable.
For shops that get monthly retainers, the Show Hours option probably
wouldn't be used. Since retainers typically (hopefully) cover
the cost of staff hours, a job's estimate would only show outside
and freelance costs. n Your client might question the number
of hours shown on an estimate. That's because your client sees
that your agency plans its work very carefully, down to the hour.
The ad business is turning away from
a time-and-costs billing model to a value-based
model, where agency compensation is based on
the value generated from the work. If your
work is increasing the client's sales and profits,
it may be more profitable to simply estimate
the total cost of job--including creative time.
The Show Hours option is just an option, after all. You can always
estimate the hours for internal job tracking--just don't include
them on the printed estimate. You can decide to show or hide
estimated hours separately for each job. The problem is, once
your client knows it's there, they may ask to see estimated hours
on every estimate
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By Mindy
Williams
"Clients & Profits gave us a
consistent structure to the (work) process which speeds up estimating
and makes one consider all costs," says Mark Deitsch, the Accounting
Manager for Vienna, West Virginia-based Deitsch Design Group.
Clients & Profits
was designed specifically to give everyone in your shop a common
place to estimate jobs. Since everyone uses the same system, everyone's
estimates will look the same. No matter who does the estimate,
your clients will recognize that they're from you. But while each
estimate looks the same, Clients & Profits gives you the flexibility
to tailor an estimate for each client.
How
does it work? First, there are two estimate formats: Simple
estimates and advanced estimates. Simple estimates let you make
an estimate fast by simply entering each task's budget, hours,
markup, billing rate, and estimate amount. An advanced estimate
is more detailed, providing up to three separate estimate amounts
per job. If you need to give your client a choice among different
printing quantities (10k, 20k, 30k) or various color qualities
(1-color, 2-color, 4-color), then the advanced estimate is used.
The column headings are customizable. |
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Estimates
can be revised as many times as needed. Each revision is numbered
automatically. Estimate revisions are published instantly as
they are saved, and can be reviewed and reprinted from anyone's
computer. If your co-workers need to see the estimate, it's available
to them as soon as you save it.
Each
estimate has display options that show more or less detail on the
printed estimate. Tasks can even be rolled up into one another
to show a client only totals, not individual estimate amounts.
Or, you can show a client the job's grand total only.
Concludes
Deitsch, "Be faithful to it, always use it, and you'll always
have a clear goal to work towards."
Mindy Williams is a senior member of
the Clients & Profits support team.
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