The Anatomy of a Creative Project
Whether you are a sole proprietor, team manager, or business owner you understand all the different phases of a creative project. Clients on the other hand, have no idea how many steps there are to creating the deliverable they are asking for. What’s important to remember is that when you price a project, you should consider all types of work that contribute to the final product or you will leave yourself vulnerable to underquoting. I’ve identified six aspects that make up a creative project that I consider when estimating the potential hours and value of a quote.
Objectives
Every project starts with a set of objectives. Lots of times clients will not define these. You should use your sales process to learn and define these objectives so you can appropriately come up with solutions for each problem. For example, when pricing a website don’t just outline the sitemap, talk further about what the client expects a user to accomplish within each section of the site. This will help determine the number of layouts and functionalities and lead to a more accurate time estimate. These follow up questions may also lead to more work opportunities that weren’t initially considered, but can improve to the overall outcome of the project like copywriting, photography, or digital marketing services. I’ll touch more on that in “Part 6: Using the Sales Process to Strengthen Project Pricing.” The size of the scope of the project should be a large factor into how you price the project. This is the traditional theory of more work equals more pay.
Execution
Once you’ve defined a scope of work for the project you can consider how you plan to execute. Define how much time is budgeted for each phase. Assemble a team that is available and suitable for the tasks at hand. Visualize the different situations your team may encounter throughout the project process and predict any hurdles you may have to overcome.
It should go without saying that a more complex project should require more time to accomplish, but what you may need to be reminded of is that with more complexity comes more unforeseen issues that will cost you time. For large design projects the hidden cost may be the endless cycle of revisions on a large catalog which can get out of hand without a project manager steering the ship true. In programming it may be the additional functions necessary to make the one function you planned on implementing even work at all.
Consider the unforeseen, but predictable, hurdles as billable time for each of your scope objectives by factoring in a contingency estimate. In our hourly calculation, we add 15% more time beyond our initial optimistic estimate. This is not a tactic for arbitrarily marking up a quote, it's an acknowledgement of the common tendency where creatives forgot that a project is fluid and involves more decision makers than themselves. We could all produce work on our own quickly, but the reality is more ideas and opinions leads to more time spent on the project.
Workforce
The size of your team will also affect your project. While considering the amount of time spent on a task is the first reaction, don’t forget to consider how many people will be involved on the project. If your team is large and experienced, you will be considering a higher estimate of labor costs for production. You may have a larger team, but how many people will be assigned to the project will determine your team’s hours. If you are a freelancer, you may be able to have a lower cost due to the lack of overhead and complete control of time budget. These affect both the price and the timeline of the project and each of those are important to remember.
When LUMINUS was first started Mike and I had great value to provide customers as a two-person team. What we realized when we grew our team, was not only that we needed to factor in project management, but we also were adding value to our process by starting to bring in more specialists for each phase of a project which increased the value of our work.
Timeline
Every project has a timeline. Generally speaking, we all can take a rough guess at how long a project will take to complete and then consider how many unforeseen factors may extend that. We use this educated guess to give a client the forecasted schedule to reach a completed project. The client may have a hard deadline or need the final product faster, which may bring up the need for a rush fee. Timelines have a big impact on pricing.
Timelines also affect the client’s perception of your performance. A good project manager can loop in clients frequently to keep a project moving along on schedule. Additionally, when a project hits a snag or you get backed up, the project manager can also be a great liaison to inform the client why and how the delay affects their delivery date.
Project Management
This leads me to project management, which is an often overlooked aspect of pricing creative projects. These are the hours necessary to keep the project moving along. Be careful about assuming these hours should just roll into production time estimates.
We’ve encountered times where we’ve spent more time working with the client coaching them on things we need or moving them along with the project than we have actually producing the final product. Clients are commonly experts regarding their product or service, but rely on creative teams to not only produce, but educate them on the creative process and end product. They need to know the user patterns, administration options, and ways the piece can be used in the public. A good example of this would be login user based websites, which come along with many user options and actions that the client will need to be educated on and understand in order to approve and then use the website post launch. This is crucial time spent by your team to help make sure this project succeeds in both production and launch when handed over to the client.
Project managers are more critical on larger teams. As the size of a company grows, the communication between team members themselves as well as with clients becomes harder to keep tight. Project managers stay on top of this. This is valuable time that helps complete successful projects and should be considered part of the billable value. A client wants an efficient project process to keep the cost / value ratio tight and the project manager is the conductor of this orchestra.
Overhead
We also use a full arsenal of programs and devices to complete creative projects. Sometimes we turn to stock libraries or outside vendors for material support. These are overhead expenses that should be considered for each project type as well. If these costs aren’t factored in at any level within your hourly rate that you use to calculate project price, then you are undervaluing the time and the costs you put into to the project yourself.
All of these creative project characteristics have contributed to the creation of numerous respectable pricing models that people in our industry align with. Some prefer the detailed aspect of strictly billing for hours spent on a project after they dialed in their hourly rate. Other prefer the predictability and simplicity of a flat rate quote so that they know what’s expected of them and feel good about the value they receive in return. Others want to know the price they offered reflects simply what they believe they are worth.
Then there are people like me, who try and sample ideas from each model to define a system that relates to situations they commonly find themselves in. That’s how I arrived at creating Golden Mean Pricing and developed a theory that allows for flexibility to account for each unpredictable variable within the guts of the scope.