View Full Version : Billing Question

Liesl Dexheimer
06-14-2010, 10:55 AM
I have a job which has required me to put a lot of planning into the project. It's actually for a donor wall. I'm not sure exactly how to go about billing the job. Should I just charge one flat rate and in the description put price includes stock, fabrication, setup and engraving or should I actually bill by the number of hours as well as the donor wall plates themselves? If I were to charge by the hr what would you suggest would be a fair price? I would like to get $65.00 per hr but am unsure of how our customer would react, we are a small business...so now I'm thinking about $40 - $50 per hr. I don't want to cheat myself out of money but I want to be fair as well. So far I've spent approx 4 hrs between meeting with the customer & planning the job.

Rodne Gold
06-14-2010, 11:03 AM
I would charge for the whole job. Problem with donor walls and such like is you are ALSO expected to be a "donor".
I would remind the folk commissioning this that you need to use materials that are going to last a long time (and thus dont use materials you know wont be available in 4 years) , apart from this , be prepared for orders of a few plates at a time in the future.

Dan Hintz
06-14-2010, 11:03 AM
How would you react to not getting paid well?

As a client, I don't like per hour charges unless there is a written limit to what the maximum number of hours will be. Even then I'm loathe to use such a billing method as the contractor invariably finds a way to max out the number of hours. As a manufacturer, hourly billing can be a windfall if you get the right price per hour ;)

Determine the scope of the job... materials, time, etc... and determine from there. If you cannot determine the full scope, you shouldn't start. You're already down 4 hours, so how do you plan to get paid for that time if the job starts? How do you intend to compensate yourself if the job disappears into the ether and no one has paid a dime?

Gary Hair
06-14-2010, 11:06 AM
we are a small business...so now I'm thinking about $40 - $50 per hr. I don't want to cheat myself out of money but I want to be fair as well.

Since you are a small business you certainly can't be worth any more than about $30 per hour. Since you are a small business you certainly can't do work as well as someone with a large business so you can't justify a higher price. What's that, you do high quality work, just as good (or better) than a big business? Then you should charge an appropriate amount, large or small business doesn't matter one bit. It may change your overhead a bit, but it certainly doesn't affect the value of the work you do.

If you are next door to a "big business" and you are both bidding on the exact same job, is there any reason that your price should be lower than theirs? NO. You could price lower because you have less overhead to cover, but that certainly doesn't mean your work is worth any less than theirs.

Come up with a fair rate and charge them appropriately.


P.S. I'm a "small business" and I charge $120 per hour for laser/cnc/sandblasting/design time.

From wikipedia:
"A small business is a business (http://sawmillcreek.org/wiki/Business) that is privately owned and operated, with a small number of employees (http://sawmillcreek.org/wiki/Employee) and relatively low volume of sales. Small businesses are normally privately owned corporations (http://sawmillcreek.org/wiki/Corporations), partnerships (http://sawmillcreek.org/wiki/Partnership), or sole proprietorships (http://sawmillcreek.org/wiki/Sole_proprietorship). The legal definition of "small" varies by country and by industry. In the United States (http://sawmillcreek.org/wiki/United_States) the Small Business Administration (http://sawmillcreek.org/wiki/Small_Business_Administration) establishes small business size standards on an industry-by-industry basis, but generally specifies a small business as having fewer than 500 employees for manufacturing businesses and less than $7 million in annual receipts for most nonmanufacturing businesses"

Liesl Dexheimer
06-14-2010, 11:21 AM
Thanks for the advice. The advantage I have over our competition is that I have a BA in Graphic Design & letterform & the customer does know this but I know that doesn't always mean anything. I'd love to know how design firms charge for something like this. Anyway, I think I will charge a flat fee which was my gut instinct to begin with.

Mike Null
06-14-2010, 11:32 AM
I would itemize the job and be sure you get a fair price for each element.

As Gary says, get fair market value for your professional skills and equipment.

Liesl Dexheimer
06-14-2010, 11:57 AM
Well I'm definitely going to tried to get the price I want now. After all my hard work of planning the job, I sent a small scaled version of the layout and then they email me back with an idea of how they want it too look and yet their plan isn't to scale & they just say maybe you could fit it to scale. They even had said they wanted me to plan it and now they want it the way they planned it. Why the heck did I go to all that work?! Couldn't they have just sent me their plan & saved me the hassle?! Ughhh!!!!

Now I really don't know how to bill this thing other than more hrs = more money they have to pay. The one advantage is that they said they are willing to pay the extra money to have it look nice.

Dan Hintz
06-14-2010, 12:00 PM

While I would love to have a more artistic mind (and the degree to prove it), it means nothing unless the client is expecting you to come up with a unique design. It says nothing about how fast you work or the quality of it. If it comes down to you competing with the big boys next door who have a ton of overhead, trimming your price back a bit can help you win clients over... just don't do it at the expense of your own business. Some day you'll be big and competing with the guy next door working out of his garage... your only hope is his quality and turn-around time suck ;)

Dee Gallo
06-14-2010, 12:38 PM
I'd like to jump in here with my perspective on this subject. Personally, I do not like to charge by the hour. I have 50 plus years of training and experience which allow me to work more quickly and efficiently per hour than a lot of others. An hourly wage is insulting. This includes planning, designing, layout, research, etc. as well as production skills, excellent equipment and the ability to run them, and good selling skills. In my opinion, each of these skills is as important as the others and cannot be billed differently. They all add up to the bottom line. Also should I be paid less just because you work slower than I do if we make equal quality work? I think not.

I charge by the job and sometimes I end up working for cheap and sometimes I make out like a bandit. But on average, I make the amount I feel I deserve for a job.

As a retired commercial art teacher, I know that students always need to know how much their work is worth. NOT how much their time is worth, nor how much THEY are worth. Customers value what you produce and they really don't care how much trouble it caused you, how much training time you put in, how much your education cost you, how much you pay your employees or whether you really really tried hard. Very few (if any) laser engravers get customers because they are famous laser engravers and their name will impress the buyers into paying more than they would normally pay.

Produce high quality work, stand behind it, make your customers feel they are important and smart to buy from you. And charge by the job.

cheers, dee

Martin Boekers
06-14-2010, 1:02 PM
One thing I would do is charge something for design time (even $50 flat) but apply it to the purchased peice. That way you cover a bit of your time if they cancel.

One think to do is spend a few minutes checking pricing on donor boards,
you may be surprized how much they really cost.

If your's is custom then you should be able to get more for it.

Through the years I have done a lot of work for different organizations and yes, most do want you to do it as a donation. How I approach that is I offer to donate an item for their function that they can auction. Usually works
good for both of us.


Dee Gallo
06-14-2010, 1:30 PM
I don't want to cheat myself out of money but I want to be fair as well. So far I've spent approx 4 hrs between meeting with the customer & planning the job.

I'd like to comment on this as a separate issue. I have found that if you learn to interview your customers properly, you will save yourself a load of time and work.
At $50 per hour, you are already at $200 before you even do any real work. I don't know what the final cost should be since I don't know what the job is, but that's a big tip to add onto the total. And it's not the customer's fault you spent that time on them.

The comment "I want it to look nice" means absolutely nothing. Nice to you is one thing, nice to them is another and as many people as you can find it means more things. You can be a great designer, have all the degrees in the world and still not please someone with that as your guideline.

Here are some things I do:
1. show the customer some samples and/or photos of similar work, fonts, colors, woods, whatever might come into play. Have them tell you what they like and don't like and why. This way you are on the same visual page. Don't give suggestions, just listen and take notes.
2. ask the customer how they intend to use the work, what type of feeling they want it convey (use words like formal, casual, modern, traditional, etc. and show examples of what those words mean visually)
3. ask the customer to sketch their idea of what it should look like right in front of you - it will tell you whether they have thought it through or not.
4. draw a simple diagram right there to confirm what they are asking for. Don't try to make it pretty, just make it clear. You can draw 3 examples of ways to interpret what they've told you and let them point to the one they like. More than 3 will cause problems.

In a few minutes you can have enough info to proceed in the right direction and not waste hours designing something which will be wrong anyway. You have to force them to think about the project, which I find many people have not done. When they say you pick the color, I say I don't have to look at it ... YOU pick the color, I'll help you. When they pick a font which is not within their parameters, guide them to a better choice.

When you have a final design for them to approve, they will not be surprised or thinking it was not what they had in mind. They will feel confirmed and solid as if they did a good job.

okay, I'm done for now, cheers - dee

Liesl Dexheimer
06-14-2010, 1:36 PM
Dee, thank you for that bit of advice. It really does help, especially coming from someone in a related field.

I guess what really bothers me is how undervalued you can feel as engraver. I remember when I first started out (about 8 1/2 yrs ago), I loved when a customer would come in and pick up their order & they were truly happy with it. Now-a-days, we don't get the walk-ins as much and they still are happy with the piece but it seems like it's harder to make a sale & when we do, it's a lot of work and not much in pay. What really annoys me is how in other industries, people can make a killing. For example, the marine industry or even the electronics industry. People are willing to go to Best Buy and spend $1000 for a TV and yet if they want something small engraved they aren't willing to pay for it. But then again, that's life and the nature of the business.

Rodne Gold
06-14-2010, 1:45 PM
Here's how I "process" a donations board
1) What is the size of the area it is to span - gives me a rough idea of materials and elements I can use.
3) What is the corporate culture and nature of the org , gives me a rough idea of what to do to make it a "part" of their org
4) What is the current decor- helps what I suggest fit in
5) How many donors are there and how many would be the max required over the boards lifespan
6) Are bigger donrs to get bigger plates or perhaps a different colour plate
7) Are Donor logo's involved
8) Is there a boilerplate wording or do the donors have some say
9) do the elements have to be weatherproof, is there somone to maintain the thing , like cleaning or polishing
10) How do we treat onesies
11) What is the budget
12) When do you need it
13) Who is going to put it up
14) Is there a grand opening , where perhaps a curtain needs to be provided
15) Who has final say on the design
16) Can I get 50% deposit up front and the balance on completion
17) How will I get the names to go on , electronically , handwritten
And so on...
I will discuss concepts , but as soon as I start doing drawings or renderings , the meter is ticking

Joe De Medeiros
06-14-2010, 1:48 PM
At $50 per hour, you are already at $200 before you even do any real work. I don't know what the final cost should be since I don't know what the job is, but that's a big tip to add onto the total. And it's not the customer's fault you spent that time on them.

I agree, any work up front to get the job should be written off as marketing to get the job. It's important to get things in writing as soon as possible with clear fee structure. I don't think $65 per hour is out of line, when you consider everything, The company I work for charges me out at $150/hr for design work.

Rodne Gold
06-14-2010, 1:49 PM
Liesel , there is no value to being an "engraver" these days , there is no manual dexterity required , you need a modicum of design/layout knowhow and the entry price of a machine capable of doing the job.
You don't have to be a craftsman like in the old days when all was done by hand.

Dee Gallo
06-14-2010, 1:56 PM

I share your frustration at the way people perceive value. But you should know that design firms and production artists are two different animals and when you are both, you tend to be thought of as production.

I do design work for companies all over the place and it has nothing to do with laser work. When I make things with my laser, the design work is included in my final fee.

It sounds like you have not decided which camp you belong in. You can do both, like I do, but think of them as separate worlds, which they are.

cheers, dee