Real-Life Decision Making
When you're a self-employed desktop publisher, a big part of your
job has to do with estimating how long various jobs will take you to complete.
Before people give you the work, they want to know how much you will charge.
Many people don't like to pay by the hour because they're nervous
about what you're doing when they can't see you. After all, they
think you could be talking to a friend on the phone while the clock is running
on their project.
The solution is to charge a project price. That is, you tell your prospective
client that a project will cost a certain amount of money, regardless of how
long it takes.
Still, to arrive at that price, you must estimate how long it will take
to do the job. You must also consider how much money you need to cover your
operating expenses and pay yourself a salary.
Often, especially when you're just starting out, there's a tendency
to underestimate the length of time a job will take. That can happen for many
reasons. Maybe the client changes his or her mind half way through and wants
to add some new element to the brochure you're working on. Or, maybe
there's a lot of design work involved.
When the job takes longer than anticipated, you might lose money. But sometimes
it can work in reverse. Sometimes the job takes less time than you thought
it would.
You are a desktop publisher with a flair for design. Ms. Edge of the Very
Sharp Scissors Co. asks you to design a logo for her company.
Logos are a very important part of a company's image. You must do
a lot of research before you can give Ms. Edge sample designs to choose from.
Some things you should know include how the company sees itself, its history,
its vision of the future, what colors are part of its identity, who its competitors
are and so on.
The logo is something the company will have for many, many years, so it's
important to choose the right design.
You charge $100 an hour for this type of work. To do the research and complete
the design, you estimate it will take 30 hours. You tell Ms. Edge you will
design the logo for $3,000. Ms. Edge thinks that's a bit steep, but she
can live with it.
As soon as you start designing, your mind goes into overdrive. You come
up with lots of great ideas and Ms. Edge is delighted with what she sees.
You are able to fine tune the chosen logo and complete the project in 25 hours.
Should you stick to the original quoted price of $3,000 based on 30 hours
of work? Or, should you charge Ms. Edge $2,500 and pass on the
savings to her?
What do you do?