Re: flat fee question...

Subject: Re: flat fee question...
From: Rebecca Phillips <Rebecca -at- QRONUS -dot- CO -dot- IL>
Date: Sun, 1 Dec 1996 10:04:56 +0200

Using a flat fee is risky, but if you do it right, it can be a
reasonable alternative. Whenever possible, try to charge by quantity
(page or character) or by the hour. If you are charging by the page or
character, make you should have a different rate for graphics.

When using a flat fee, you should take into account the following

1. The client may not know exactly how large the project is. Frequently,
necessary elements such as an index take up pages the client "didn't
think of". Suddenly an 100-page project goes up to 110 pages. Make sure
you are covered for a maximum page count.

2. The system is always changing. How many rounds of changes are
included in the flat fee? Most clients want you to keep changing the
text until they are satisfied. You have to know the clients. If they are
perfectionists, you are going to be making a lot of changes. If the
product isn't mature, you are also going to be faced with a lot of
changes. Your contract could have a clause saying that more than three
rounds of changes result in an hourly charge.

3. Clients don't understand why graphics always take more time and
effort than text. In fact, I don't know why they take more time and
effort than text. But they just do. You have to budget time differently
for a hardware manual, where you have to draw the pictures, than for a
software manual, where you can just capture the screens.

4. Even simple screen captures take time if you've never used the
capture tool before, or if the system you are documenting uses a
different operating system than the one you are writing the manual on.
More commonly, the customer forgot that you actually have to perform the
captures on the system you are documenting. "Oh, you need one that
*works* and that nobody is using right now?" If possible, before pricing
the project, see what capture tools are available (sometimes the client
expects you to bring one) and how they integrate with your DTP program.

5. If the client doesn't want to take any of the risks, pad the price. I
had one client who insisted on an all-inclusive flat fee. I calculated
the fee on a per-page basis, added an extra 10% because the project was
probably going to be longer than the client predicted (it was), and
another 10% for the index, disclaimers, and other pages the client
"forgot" (I ended up writing two pages of safety warnings). Then I
topped that off with another 20% risk factor. That is, if there were a
couple of extra rounds of changes, or the project dragged on, etc., the
risk was my responsibility, not the client's. Therefore, the price is
higher if the client wants a flat fee which includes everything, no
matter what happens to the system (there were last-minute hardware
changes resulting in my having to re-draw several diagrams and re-write
several procedures). I would have made less money if the client had
agreed to a an hourly charge, but then the client would have been taking
all the risks. That is, if the project dragged on, the client would have
to pay more. (When I calculated the hours at the end of the project, I
was pretty close. I made a bit more than I would have by the hourly

4. If you charge an hourly fee, you never need any padding. I've been in
situations where I worked at a client's site, and when I got there in
the morning the network was down. Or the SME didn't get to work on time.
Or whatever. When you work by the hour, you don't care. You are there,
at the location, and the broken network isn't your fault. They forgot to
call you and tell you not to come today? Well, you can at least charge
for the hours you took to get there and back. If you charge a flat fee,
this is your problem, and your cost.

I don't want to sound like you should try to screw your clients. But
when I sit in rush-hour traffic for an hour to meet someone at 9 am, and
they don't show up, I want to have the costs covered for my
transportation and the time I could have been meeting another client. I
freelanced recently for a few months when I was looking for a new job.
In those few months, I worked at the clients' sites. I never had clients
who were deliberately trying to make my life difficult. Still, at least
one time in five, when I got to the client site, something on their end
wasn't ready and I ended up twiddling my thumbs. If you charge by the
page, which I think is the fairest way to charge, do everything in your
power to make sure that your client meetings are going to be productive
so that you don't end up thumb-twiddling.

I'm not saying not to use a flat fee, just make sure you are covered if
you do so. As suggested in previous posts, you should make sure that the
flat fee agreement takes into account all the risks. If your main
concern is that you need the work, call up the local technical writing
companies and ask them what their rates are (as if you are a client, not
as if you are competition). Then just undersell them. If the client
knows and likes you, why would he go to another writer he doesn't know
and pay more?

Good luck.

Rebecca M. Phillips
Documentation Manager
Qronus Interactive Ltd., Automated System Testing
14 Shabazi Street, Yahud 56231 Israel
rebecca -at- qronus -dot- co -dot- il
Phone: 972-3-5392207

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