SECRETS FOR ESTIMATING
SUCCESS
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PROS
& CONS :
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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