From The Archives ~ Topics: studio management
Payment Strategies
This is an excerpt from chapter 7 of Professional Practices in Graphic Design.
It’s the nature of working in a creative industry; each job and client has unique characteris-tics, requirements, and needs. Although the professional flexibility can be rewarding, devising a consistent payment strategy can be another matter altogether. What may work for one client, may not be quite right for another. Your best strategy is to approach your payment schedule as you would any design project, personalizing your methodology with forethought, research, and creativity. Several proactive measures and precautions to define your payment schedule can help prevent future obstacles to a successful relationship with your client.
Read the full chapter, Payment StrategiesFrom Professional Practices in Graphic Design, Tad Crawford, ed. Allworth Press, 1998. Re-printed with permission of author.
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A must read for any person or firm providing design or illustration services. Always get a contract and/or purchase order before performing any service for a client. They do the same when they provide a service or product to their customers, why shouldn't you. It also shows how professional you and your business is to the client.
From experience, if a customer is difficult at this stage of the ball game it will usually get worse as far as the project goes. -
Our industry has a long history of bending over backwards to "secure" clients, especially new ones, often comprimising ourselves and our businesses. And as creative people, we are immediately faced with the handicap of being perceived as poor business people, making us even more susceptible to the poor intentions of bad clients. Finding that comfortable point between flexibility and discipline in billing practices is hard. We don't want to seem greedy, nor do we want to lose our shirts. And at the end of the day, most of us care more about the work than the monetary compensation. That puts us at great risk. We are designers in large part because it is personally fulfilling for us, and our eyes glaze over at that first glimpse of "the new project", full of opportunity, promises of greatness and cool new typefaces. And with such a competitive industry, we know if we don't give in to the client's demands, they may very well take their opportunity elsewhere. Our own studio has found that the extra work done upfront to research potential clients and their specific payment needs, and to design personal payment plans that suit each client, proves to be an invaluable asset to our financial stability. But of even larger contribution has been our ability, over time, to identify our own intentions for entering into each project. Creative people are by nature not just risk-takers, but risk-seekers. You cannot pull that out of a design studio's equation without sacrificing the quality of the work. High-risk clients often hold some of the most interesting opportunities creatively, so we don't want to shut them out entirely. Finding a cash-flow structure that can accomodate them, even thrive on them, has been the key for us. Now, we have two "sets" of cash-flow running in conjunction with each other at all times. The first cash-flow is based on low-risk clients, and the other higher-risk. We plan our business' growth only on the low-risk cash-flow. As higher-risk clients (usually the new ones) move down to the lower-risk flow, our studio grows in stability. When cash-flow is fully stable, we seek out higher-risk clients with unique creative opportunities, thereby starting a new cycle. It's alright to agree to some risky terms if your business isn't depending on the income. Just make sure you stand to benefit in other ways should the billing agreement head south. And only take the leap over a platform of an already stable client base.
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I am having problems downloading the PDF files containing full-text versions of the articles. Is this happening to anyone else? Any advice on how to fix this? Thanks!
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The PDF is not opening - in fact when you click on it in either Firefox or IE, there is nothing there.
I really would like to read this one, too!
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