The Art of the Estimate
The purpose of this chapter is to describe the concept of producing an estimate for proposed work so that it aligns to what you intend to actually bill them for when the job is completed.
In truth, it isn’t always clear how much time and resources it will actually take to complete the proposed work because unanticipated issues can arise. The best anyone can do is to make their best guess according to their experience and what seems to be appropriate according to convention. And this is where producing an estimate that “looks right” can be tricky.
For example, a client may have produced other projects similar to the one they are proposing to do with you. If this is the case, they may already have a sense in their mind of how much it should cost to produce the proposed product. Therefore, your estimate (and the final billing) should be consistent with an appropriate cost to produce the proposed product.
What is an Estimate?
Some, but not all, visual media projects require producing an estimate (sometimes referred to as a bid) to describe all of the costs related to producing the product you will produce. The estimate should include the cost of consumables (things that you must buy that are used exclusively in the production process) and the cost of your labor (your fee).
There are other details to consider in an estimate, such as the cost of equipment you must rent, special applications or plugins, sub-contractors, transportation/postage, meals for clients during editing sessions, and a contingency amount (a small percentage of the overall estimate) to reserve for overages.
For the sake of simplicity, we will set aside those details to focus on the one aspect of the estimate which is perhaps the most important: your fee.
The fee for your work can be charged hourly or by the day. There are no hard and fast rules to operate one way or the other, but there must be a clear understanding up front with your clients about which method you intend to use as you proceed through the job.
For example if you charge a day rate, the expectation is that, from the client’s perspective, you will be working on the project for the entire day that you are booked, and that you will only bill them a day rate under those conditions. You would not, for example, bill the client for an entire day if you only worked five hours. It is your responsibility to track your hours to make sure that you are in compliance with what has been agreed to, one way or the other.
And this leads us to a discussion about what would be considered fair in a situation that is slightly unusual.
Client Relations Scenario
The client has asked you to produce a project that sounds very interesting to you because it would improve your portfolio. However, the techniques required to complete this project are a little bit beyond your current skill set. You don’t want to decline this job just because you need to learn something new.
So how do you approach producing an estimate for a job that you know will take longer than it would normally take if you already had the skills to produce the desired results?
If it would normally take someone with more advanced skills only two days to produce the final product, how many days of work do you put into your estimate knowing that it will take you four days because of the skills you need to learn and practice?
In your decision, consider that the client will be gaining the benefit of you having worked double the amount of time to complete the project. Shouldn’t they pay some part of the time it takes for you to produce it as you learn new skills? Or should you exclude the cost of learning new skills from your estimate?
Also, should you disclose to your client that you are learning something new in this job, or keep it to yourself? What are the risks of disclosing the details of this situation to your client? What are the risks in not disclosing it?