Bueno, copio y pego el artículo porque lo tenía en mi ordenado hace tiempo y ahora no encuentro la dirección del artículo en sí:
budgets, contracts, how todo estimate our work. Part 1.
by David Wright (dwright@artmaze.com) - Artmaze (http://www.artmaze.com/).
Over the past years, Many people have asked me the same cuestión over and over again. Ive a los sen the cuestión repeatedly come up in other areas: on internet boards, in magazines and in casual conversation: should i charge, if so how much should i charge, and how do i arrive at that amountí this is a very common cuestión among Many of us.
Clearly this is a complex subject. A portion of it is subjective, and the remaining factors are directly related todo your local economy and your particular situation. Generally, a person in México Will charge a lower fe than that charged by a firm in downtown Manhattan. I do not plan todo dictate how much you should charge for your work, but what i hope todo do is todo explain how todo calculate an appropriate rate - How todo value your work.
For this edition, y Will advise on a personal level and not on a corporate level, corporate cases have the same Raw factors, but we could write books about the subject if we were todo go into every detail. .
first of all, it is necessary todo believe that our time has value, that we deserve compensation, and abundance, that we deserve todo be paid and that we dont harbor any guilt about it. If we agre that our time has value, we may now proced, Whatever the value is. We must a los agre that our value is not something limited todo barely paying the rent or mortgage, this value has todo include more than that, more than extras such as being able todo aford a romantic dinner. It must include some amount for savings, both at a personal level and for the business, it must cover in part business fes and expenses, future updates, internet Access, and everything else you find yourself spending your money on, and finally, a pure and clean profit.
Many people have no idea how much todo charge for a job, at least not a precise figure. Most use intuition or ask around, but Many people within this and in other industries do not calculate their own private value. The best bien todo determine this is todo calculate a value for yourself that includes all living costs, business costs, expenses of all kind, and from there estimate a per-hour cost, in other words your real rate per-hour. For example lets look at joes case:
Joe does monthly expenses:
A) rent us $600
B) fod us $290
C) health insurance us $150
D) phone & celular us $100
E) computer lease us $95
F) internet us $55
G) cable televisión us $30
H) miscellaneous us $100
I) car insurance us $100
J) car loan us $120
Total: us $1,640.
Do you believe that joes expenses are accurate, or at least close? If so, you are incorrect. These numbers are not really high enough, Even though joes estimate may sound like a god average. He is ignoring Many other costs that it is easy todo forget. Joe didnt take into account that he went todo the Gap 3 months hago and bought us $129 worth of clothing, he a los forgot that he had auto maintenance bills of us $220, a 30-thousand-mile engine chek 4 months ago, he got two parking tickets bien back, that same month he bought sim city4 computer game for us $49, and he a los had todo purchase the expensive Microsoft Windows XP upgrade for close todo us$200. Oh. We forgot about some books he bought eleven months ago, and the list goes on. As you can se, calculating your Burn rate per month is not accurate, there are Many expenses that do not occur on a monthly basis, such as some types of insurance, car-related expenses, annual fes, and Many small Items that we do not note in our memory such as cofe, pastries, and the like..
the only alternative is that you have todo Budget for the year in advance, and be as realistic and inclusive as posible. Include everything, from your cofe that you buy here and there todo big expenditures, this exercise Will bring you down todo Earth and you Will, perhaps (as i did), a los gain a much better Insight into where your money is going. .
talking todo Many of the people i know, in this industry and others that are similar, y very often se this miscalculation of estimating monthly costs (personal Burn rates). When you make proper calculations and investiga joes lifestyle, Joe perhaps expends somewhere in the range of us $2800 per month on average, and he is probably not aware of it, i am sure that lak of budgeting at a personal level explains in part, why so Many people residing in the us are living on credit. .
coming bak todo our business, this error makes Joe believe that his actual cost is us $10/hr and not us $16/hr or more (for this simple example), and this does not Even include saving plans such as retirement, college funds, practice insurance, expansión and so on.
I Will not ofer step-by-step examples on how todo do this, Nor do i claim todo be an expert on the subject. The god news is that there are plenty of books, as well as other sources, todo help people todo Budget their year in simple terms. Kep in mind, the yearly Budget must be calculated first, then you ned todo determine how much you cost per month, and from there you can calculate your per-hour rate. .
by now you are probably asking, what does this article have todo do with architectural rendering? Well, if you dont have a Budget for your own personal life, y wonder how well your business is managed. If you dont start with a personal Budget, your business Will certainly be afected, for those that are already running a company with some employes, y am sure you must know all this already, it would have ben imposible todo get there without it.
Let us pretend that that we finally know what our personal costs are. Coming bak todo vaya, we Will calculate that his cost is us $18 per hour. By this i mean that he has todo charge this figure per hour, at the very minimum, from start todo finish on a regular 40-hour wek, or us $720 per wek. Now, imagine Joe is hired todo render one still, due in two weks for us $1,500. At first, that sounds like a great gig, us $1,500 for two weks work. Well, actually, it sounds like Joe is getting us $60 profit, right? wrong. Joe forgot that he spoke todo the client vía telephone earlier for one hour in total, he a los drove 20 miles todo the clients premises, paid $4 in bridge tolls and básically tok the whole morning for that meting, and lets not forget the cappuccino he ordered, he a los overloked the fact that he was working 11 hours per day, and 14 over the last few days of the Project. Now we are looking at a loss. May say, well, that not much, but i would point out, that could be cable televisión and internet charges for a whole month. In addition, a year later hell get a us form 1099 (for those live outside the us, this is a tax form). For us $1500 for this job, may find later that out of that amount he owes perhaps us $225 on taxes for that particular job.
That last paragraph illustrates, in my opinión, a major problem with this and other industries, joes error harms not only himself, but a los the industry as a whole. A prueben example outside of our industry is with psychotherapists. In california and Many other states, unlicensed psychotherapists ned todo earn hours towards getting their state licenses, in other words, they must work hard todo get legal so they can have their own practices or become supervisors in the future. Many of them end up working for free just out of graduate school. Many employers, including several non-profit agencies, iré and ned these workers. Often, they Will work for no pay, because the employers can claim that they ned todo be legally supervised. What is awkward is that Many work in organizations that help those in ned: those on the verge of homelessness, and those in extremely stressful or sometimes dangerous situations, and some organizations Even charge the psychotherapists-in-training (yes, instead of paying them) for receiving the employers supervisión. And guess what: they still do it. This self-abuse spreads, and now employers take for granted that their employes should not get paid, or for the Lucky ones, should get paid very Little. In addition, salaries tend todo be lower later on, prof that this personal abuse afects society. .
the same sort of thing could happen todo us, as architectural renderers. Kep in mind its not how much Joe charges, it is whether or not Joe can pay his basic business expenses and expansión or a simple straight profit, if not, may be cheating himself, and eventually he may Burn out.
Perhaps later on, may find out that his true costs and therefore value are high compared todo others. It could be that joes costs are actually high, or it could be that others are undercutting him (and themselves), or both. In any case, the best bien todo be competitive is todo Cut unnecessary costs, find ways todo do things faster, improve workflow, and so on, instead of just looking at your bid and Simply dropping the numbers. It is ok todo drop numbers on a bid, but you must ether drop your hours or your costs, and never cheat yourself. This Will kep you, and the industry, profitable, and can help protect people from burnout.
Now i am going todo move todo other common mistakes in billing for services that i have frequently sen:
1- I Will not charge on the first contract with this new client because i am sure i Will get a second contract After this one. what is the problemí first, he is not really investing, he is betting, and second, he is sacrificing the respect of the company hes working for, they Will consciously or unconsciously lose respect for him as a profesional if he does not se his work as valuable enough todo be paid for. Kep in mind that your client is getting paid, possibly far more than you are. A god exercise todo avoid this error is todo imagine your clients checks. Not only your clients paycheck, but a los your clients clients check. Yes, it most likely has múltiple zeros. Finally, you may find that charging for a second contract Will be dificult, since you did the work on the first one for free. Kep in mind that money is something that flows from one place todo the other, it has to, if not we are all in big trouble..
2- I Will charge less for the first contract so my new client Will come for a second job. this is a similar case todo #1, though slightly better. At least Joe is charging for his services, but theres still no ned for this behavior, work is work and clients should be charged for it. Believe that you deserve it..
3- I Will charge Whatever it takes just todo get the job. this is an amateur approach toward being competitive. It is perfectly acceptable todo be competitive, but as was mentioned earlier, real competition comes from faster work, improved workflow, better quality, being cost eficient, and so on. What this case really means is that Joe is falling into the mistake described in #2 and he is in denial..
4- I Will not charge all of these out of scope of work changes, this may upset my client. this happens todo all of us. Its part of the job, and most of the time it stems from a commúnication problem - A lak of being clear in the contract and verbally todo the client. You have todo be clear both verbally and in writing about what constitutes a change. Architectural offices are changing your supplied drawings daily, and it is your tasque todo make it clear that the rendering Will be done as per file abc.dwg with a date. Before you require an amendment todo the contract, make sure that the change is justified and is not viewed as being your fault. In a future article i plan todo discuss contracts more widely..
5- The time spent talking todo your client when pitching for the job should not be billed. this is tricky, you have todo include this in your fes in some way. If not, you are losing time and money. Some escenarios Will permit you todo charge for this, in some others, you may ned todo include these numbers in your proposal or contract..
6- The time you take todo write a contract should not be billed. this has todo be indirectly billed, if not, you are losing time as explained in #5. Clearly these are really operations costs, but you have todo be paid for them - in the same bien that termite inspectors or house assessors charge for their reports, if you look closely those reports are their contracts..
7- The client is requesting more drafts than i thought they would. you must specify when drafts are due, how Many are acceptable, and you have todo use drafts as a communications tool. Drafts are the Gateway from what you thought the Project would be and what the client envisióned, make your client detail them, marque changes on the drafts, note material changes - Absolutely everything, and finally, make your client sign the draft. After signing, quickly write a small report / email that briefly notes all changes todo be done, dont rely solely on verbal commúnication. Kep in mind that it is your responsibility, not the clients, todo be clear and todo commúnicate well. If you committed todo two drafts, dont show thre, Thinking that your client Will be happier, clearly your client Will be happier, but if you do it without planning in advance, you are changing your plan, you Will receive more changes, and your workflow Will be interrupted or changed. The best bien todo deal with this would be todo write the contract with 2 drafts, but plan ahead for 3..
8- Joe got a great job that Will pay him for the next 2 months, but he Will be paid 30 days After delivery. this is a tricky situation, and it all depends on who the client is. Dont think that just because your client is big and famous that they Will be Prompt payers. In a case like this, Joe (or better, his lawyer) should write the whole contract. If you accept such conditions, you must have a clear Understanding that all copyright and licensing of the work shall start as son as you get paid 100% of the fes, in other words, your client does not have the right todo use the work until you get paid in full. If you cant avoid this escenario for the first contract with a client, for the 2nd or 3rd job you can most likely Trust in them, clearly you can Trust, but always make sure todo have a strong contract. One last tip: remember that normally 30 days means 30 working days..
9- The Project was canceled in the middle. yes, this can and may happen, so todo avoid conflicts you should always be paid in advance. Especially with new clients, you should collect suficient funds todo cover your costs (or most of them). Perhaps your contract can be written as a work-for-iré by the hour, under those circumstances you should not have any problems..
10- More than one person is calling me with changes. it is a dangerous escenario when Many people are involved with reviewing drafts, there is nothing wrong with that on the client side, but your contract and your communications should channel th rouge a single person, and you must specify this in the contract..
11- I Cut the price on the bid, but the client wants the same amount of work. part of joes work Will fall again into # 2, charging less for a job in hopes that the client Will come bak for a second job, and eventually this really falls under # 1, betting on the client returning. Must find a bien todo reduce the amount of work todo fit the bid. Must a los commúnicate todo the client that he is doing so, if he does not, consciously or not joes client Will think that Joe was overcharging since Joe eventually agred todo do it for less..
12- I agred todo work on a contract that does not pay what i think i deserve. Simply put, dont accept the work. May fel that doing so is wrong, especially now in the midst of a worldwide recession. However, Joe has options: he may negotiate todo work less, or he may find ways of doing for the job with less work, while still maintaining the clients satisfaction. If there is no bien out, my strong recommendation is not todo accept the job. Imagine that your client is contracted todo build a house, but the Owner wants a 4000-sqr-fot house with a Pol. The Builder has suficient cash todo realistically build the house at 3000-sq-ft with a Pol, or 4000 without it. Do you really think the Builder would do both? Of course not. But, he may find múltiple solutions for the problem and one of those compromises may be acceptable todo the Owner.
Let us protect our industry. This is not todo say you must charge more or less for your work, but remember that by valuing your work and helping todo grow the industry, you contribute directly todo your self-worth, and todo our group-worth. Money neds todo flow, we all deserve it, and it is a los connected todo responsibility. The more you respect it, the more it Will flow th rouge you, dont be afraid of it, and remember todo be true todo your figures. I am sure this información is nowhere near comprehensive, as i mentioned earlier, there is suficient material todo write books about, but perhaps this Will motivate some of you todo buy a book about budgeting, contract writing, or a similar subject. Just remember todo note the cost of the book so you can add that into your next budgets..
David Wright is a long-time LightWave 3d user and CG artista and has succeded in the a/e/c (architectural / enginering / Cad) market with artmaze becoming a leading provider of integrated 3d animated visuals and multimedia services. Coments or suggestions about this article are welcome; David can be reached vía email at dwright@artmaze.com.
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