Is time really money?

We’ve all heard the story about the lawyer who billed an extra $20 for ‘crossing the road to speak to you, but discovering it wasn’t you’. I have worked for firms in which every minute of every day is billed out to someone, even trips to the bathroom and coffee breaks. If you start a job at 10.00am and finish it at 4.00pm, that’s 6 hours to be billed. Never mind the lunch hour in the middle, or the phone calls taken (for other clients) or the photographer dropping in for a chat before she went home.

I have seen three creatives gather in a huddle for fifteen minutes to discuss a job, and each one charge half an hour to that client – at $120 per hour each!

But those were the ‘old’ days (I hope) and they’re well past. The fact is that clients are more savvy now, and this sort of budget blowout won’t be tolerated for long.

On another tack, it’s common knowledge that new designers take longer to complete a task than their more experienced colleagues. That should be reflected in their respective charge-out rates. In other words, a novice charges $70 an hour, an intermediate $120 an hour and a star can charge $180 an hour. By rights all three should end up charging the same amount for the same result, right?

Unfortunately this isn’t always the case. Young designers often charge out at a ‘standard’ rate, while older designers might get the job done quicker, but will often ramp up the hours anyway.

The fact is that design, like every other business, is affected by the market. The market sets the price, and unless you’re a superstar with billion dollar clients, you buck the market at your peril.

Let’s say for example that you’re designing a brochure. The client has had similar brochures created in the past, by you as well as by other designers. She knows that the last one cost her $1100 (by a rival designer) and the one before that was $1000 (by you). That means your bill for this job had better be in the region of $1200 (allowing for inflation) or you could be in trouble. Too much more and you’ll lose a client. Too much lower and, although you might make that client happy, you may also be undercutting yourself, not to mention creating a monster. (You charged me $800 last time, what do you mean it’s $1300 now!)

All of which means that the job is a $1200 job. Full stop.

Is there any mention of an hourly rate? Or of whether the designer is a newbie or a seasoned veteran? Or even how long the job will take?

No there isn’t. I would suggest that the bill goes out at $1200 and how the job was completed is secondary. At a charge rate of $120 an hour, that equates to 10 hours. If you managed to complete it in eight, you’re on the winning side. But if it took 12 hours, the only person who knows is you, and any issues arising from the extra time are yours to deal with alone.

But there’s one more thing to consider. Let’s say the 10 hours for the job finish at 3.00pm. If you complete it by 2:47pm and sit back feeling smug with yourself, just ask yourself one question.

What do you do now? Is there another pressing job that’s been waiting for this one to finish? If there is, then get on with it. But what if there’s not? What if, as is likely to be the case, there are other jobs pending, but none that MUST be commenced at 3.00pm?

Can I suggest that if your most likely action now is to knock off early and play tennis, or goof off for a while, you instead spend another hour or two on the brochure? The ‘time’ would otherwise be wasted, so it’s not an issue, right? And an hour or two spent tweaking and perfecting the job will only add to your reputation, improve your portfolio and (hopefully) cement your relationship with a returning client.

Time, therefore, is not money. The finished job is king.