Money is a topic that most people dance around because they don’t want to be rude, or tacky, or misunderstood. But if we avoid talking about it, we avoid learning a very essential part of our business and our industry. In order to thrive as a professional community, we need to have a strong handle on our financials, and a comfort discussing them openly with clients and colleagues alike.
I’ve advocated this for years, and tend to be the person my friends come to when they want straight talk about money. So imagine my excitement when Marc Hemeon asked me to join him at this year’s SXSW Interactive to help facilitate a Core Conversation that he called “Breaking Taboos: Pros Get Real About Money Matters.” I didn’t even have to think twice before I said Yes.
Our goal is to get people talking about money, and Marc and I are the people to do it. I’m coming at it from the independent consulting angle, regularly needing to speak frankly with prospective clients about budgets and with existing clients about getting paid. Meanwhile, Marc is at a major milestone in his career and will be talking about money from the perspective of a startup founder. Formerly the Design and UX Lead at Digg, Marc was until recently the Director of UX at Oakley while on the side he co-founded fflick, the Twitter-based movie review site. In January, he and his co-founders sold fflick to Google, and now he’s a designer at YouTube as part of the acquisition deal.
Some of the questions we hope to discuss are:
For Indies
- How do I know how much to charge?
- When do I ask to get paid?
- Do I need a contract?
- What should I do if I don’t get paid?
- Do I need to incorporate?
- Do I need an accountant?
- Do I need to separate my business and personal finances?
- How do I pay myself?
- What are the tax deductions I should know about?
- How should I be keeping track of my expenses?
For Founders
- How do I share ownership with co-founders?
- How do I decide how much equity I deserve?
- How do we determine how much we should get paid?
- How do we determine how much money we need to raise?
- What form of company should we incorporate as?
- What should we be willing to spend money on and what shouldn’t we?
- How do we pay personal and business taxes?
- How should we determine what our company is worth?
- How do we know when it’s time to sell?
- How can we negotiate for the best sale price and conditions?
The description, time and location details are below. I really hope to see many of you there — and please don’t sit quietly. The more people who participate, the more we’ll all learn from each other.
Breaking Taboos: Pros Get Real About Money Matters
Industry All-Stars tackle the subject that we’re all most curious about but causes us the most discomfort: what, when, and how to charge for our work. Learn their inside tips on how to charge your clients, when trading work for equity makes sense, and how to avoid common client pitfalls. Stop cheating yourself and learn that you deserve to be paid in full for doing work you’re passionate about. Our work has the power to make enormous amounts of money for our clients. Let’s take a good hard look at the value we provide and how to ask for and receive value in return.
Negotiating your rate for a project is the difference between being a starving artist or successful freelancer or studio. Creatives fall prey to lowball offers, promises of future work, and other forms of wage penalties in fear of losing a potential client. Learn how the pros have created successful freelance businesses and startups by not compromising their rates and standards. Understand how they attract the big name clients and avoid the bad clients. We’ll also explore potential benefits and risks of working for stock.
Lawyers, doctors, accountants and other professionals typically don’t experience angst, guilt, or wishy-washy boundaries when stating their rates and neither should we. We see standard billing rates across many industries. We’ll take a look at the role a standard billing rate would have in the creative services industry and how such a standard would be upheld and implemented.
Breaking Taboos: Pros Get Real About Money Matters
Friday, March 11, 2011
5-6pm
Marriott Courtyard Austin Downtown/Convention Center
Rio Grande A
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Looks like a great session. Wish I could be there.
A couple of things I’d add to the Indie section:
1) How do I handle requests to work on spec or without a deposit?
2) What payment forms should I accept?
3) Can anyone tell me the money mistakes to avoid?
4) Are there money demands from clients that are reasonable, such as liability insurance?
Would love to sit and hear the great experiences you’ll both be sharing.
This was a great session (even if the room was over capacity and “hotter’n a burning stump”, as we say here in Texas.)
Here are my takeaways. Some comments were from Hess / Hemeon, some were from audience members.
* Never be afraid to talk time and money with my client.
* UX value is NOT tied to how much time I spend making it. (Don’t bill by the hour.)
* If I quote a rate up-front, I’ve lost the negotiation. Get the client’s budget first and go from there.
* A client who doesn’t have a budget has no intention of paying me. If they’re serious, they have a dollar amount in mind.
* Give a discount to clients who pay in full up front.
* Beware client assessing a “wage penalty” because I just love what I do *so much* I’d practically work for free. It’s not that fun at 5 AM after working all night.
* Don’t work for free. EVER.
* Not even for family. Especially not for friends.
* Set clear expectations. Document details — what I’m delivering, what they’re paying, when it’s all going to happen.
* Outline a process. Define the project scope in a contract.
* Get really good at selling the work I do and what I can produce.
* Set a project deadline. Get paid if the client drags their feet.
* Actively cultivate my reputation.
* Say no if it’s not a good fit. There’s no $$$ that’s worth working with a bad client.
* When pressed for a quote, give a range: Lo, Med, Hi. Clients tend to go Med or Hi.
* Discuss the triangle (quality, cost, time) with clients.
* Contract should include: schedule, activities, deliverables, phases.
* Termination clause: when the project ends early and/or poorly, what’s the money situation?
* If the client terminates early, I still get paid 50%.
* If I terminate early, the client owes me a pro-rated fee.
* Get the contract signed before doing any work.
* Get paid *something* up front.
* Don’t charge for the initial meeting. (But don’t get tricked into doing UX work at that meeting.)
* For long-term engagement, bill every two weeks. (Smaller bills, regular pay.)
* Incorporate as an LLC for liability protection.
* Look and be professional
* Control scope creep: go back to the contract.