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Testimonials
"We've been using TimeFox for nearly a year now and we love it. It's made us much more profitable and really helped us track our work on different projects with different sub contractors."
Brad Robeson
Robeson Marketing & Design
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"Your product is going to improve my department's productivity, profitability, and accountability at least 200%. What a great product!!!!"
Ellen Didier
StoneRiver, Inc.
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"It's highly functional, it's cost-efficient and it's easy to use. TimeFox has been a huge benefit to our company since Day One."
Dale Campbell
Atomic Crayon
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FunctionFox is committed to helping smaller creative companies improve their business. TimeFox, our web-based time and project-tracking tool, is designed to help smaller advertising, design, marketing and PR firms manage their business, and do more with their valuable time.
Want to improve your pricing? Not sure when to raise your rates? This month we interviewed Mary-Lynn, President of Suburbia Advertising, and asked her some questions on how she determines pricing in her agency.
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Feature Interview: How Do You Determine Pricing?
Talk to the Fox: Calculating Billable Efficiency
Advertising and Design News
Contact FunctionFox
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How Do You Determine Pricing?
FunctionFox meets with Mary-Lynn Bellamy-Willms, President of Suburbia Advertising and Founder of FunctionFox Systems Inc.
Suburbia Advertising
is a full-service design, advertising, and multimedia company specializing in retail branding. We asked Mary-Lynn some of the common questions that many creative professionals ask with regards to pricing.
How do you determine pricing in your company?
Always ask for the budget and scope of work for the assignment. So often designers are asked for a quote, but they don't ask the client for a budget, which means you're shooting in the dark and most likely giving a price that's low so that you get the work.
A good client will have a budget allocated to the work and will share it with you. If they don't have a budget and are telling you that they have no idea how much they need to allocate to their project, try throwing a number at them as a 'blink test'. For example, 'our minimum project fee for this type of work is $5,000.00'. If they balk, you'll know not to waste any more of your time.
Like most firms, we are always keen to take on new clients, especially if we believe we can get the door open to what might appear to be a great long term piece of business, but never lose sight of the fact that you're an expert and that clients looking for the cheapest price (as opposed to the best expertise and value for money) are usually not good long term clients.
If you've developed a price for a project and the client can't afford the price but wants you to do the work anyways, try these ideas:
- Reduce the scope of the project. For example, if the scope included two sets of minor type revisions - reduce it to only one set of revisions. This will force the client to stop the endless cycle of revisions. If more revisions are needed, you can now say the requested revisions are 'out of scope' and provide a quote for the additional work. In this way, you will not only be demonstrating your commitment to the client but will also be setting the standard for expectations from the outset.
- Hold true to your price, but offer a small discount that will be applied to future projects. In other words, if they can afford only $4,000 for the $5,000 you've estimated, suggest that you charge the $5,000, but will apply the $1000 'discount' to future work valued at $20,000. This will reduce your loss from 20% to 5%, and will also ensure you receive more work from them in the future.
When do you raise your rates?
You should be achieving 60% or more Billable Efficiency in the company before you even think about raising rates. Charging a higher rate won't solve billing problems and in fact, if you raise your rates too soon, you'll probably just write off more time overall.
If you are achieving 60% or more, you can afford to raise your rates. Better still, start to package price by thinking about the value of the work you're doing. Package pricing will ultimately allow you to achieve a much higher hourly rate overall. In our firm, we offer a number of services at a set price. We have not yet had a client balk at the price as we are providing excellent value and to get the pricing, we always talk about value of the outcome of the work versus purely the cost. To do our package pricing, we review our previous project reports for similar work to see how much real time the work took, and then build a package price from there.
What is your target Billable Efficiency, and how do you come up with those numbers?
My goal is to bill 60% or more of all staff time combined. The industry average is 42%, which means most firms are not achieving their potential billings. If you're not even achieving the 42% billable efficiency, then you're giving away far too much of your time.
Here's an example:
More...
This article has been provided by FunctionFox Systems Inc. For more articles and resources, see
www.functionfox.com/resources.html.
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Calculating Billable Efficiency
Question:
How do I know if I could be billing more?
Answer:
Here's an easy way to calculate Billable Efficiency for your company. Just click the image below and answer 6 quick questions. Find out if you could be billing more of your time (and increasing your profits!).
Also, check out the June 2005 Newsletter,
June 2005 Newsletter,
"Stop Giving Away Your Time", to find out how to close the billing efficiency gap and ways you can bill out more by distinguishing between billable vs. non-billable time.
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The Applied Arts Design & Advertising Awards is now in its 15th year. This respected contest is open to professionals from any country, whose work has been completed, published or aired from June 2005 to May 2006. Categories include: Design and Advertising (print) Broadcast, and Printing.
ENTRY DEADLINE is May 5, 2006. Download the Call for Entry at:
http://www.appliedartsmag.com/design_advertising_info.php
The APPLIED ARTS DESIGN & ADVERTISING AWARDS ANNUAL will be published in November 2006 and will be distributed to over 65,000 readers. Don't miss your chance to be among this year's winners.
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Questions? Comments? Inquiries?
Call: Toll-Free 1.866.369.8463
E-mail:
info@functionfox.com
Try a Free Demo:
www.functionfox.com/demo
You can opt out of the About Time Newsletter at
www.functionfox.com/newsletter/no_thanks.asp.
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Try TimeFox on your own through our easy online demo.
Explore the demo or take a Quick Tour of TimeFox.
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TimeFox Info
- TimeFox Top 10
- Pricing
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Famous Quotes
"Time is more valuable than money. You can get more money, but you can't get more time."
- Jim Rohn
"Focus 90% of your time on solutions and only 10% of your time on problems."
- Anthony J. D'Angelo
"Remember that lost time does not return."
- Thomas a Kempis
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