Tool #5: Producing an estimate

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An estimate serves to establish the tasks and terms of a commissioned project and the fee you will be paid for its delivery. When accepted – either via a signature or e-mail confirmation – by the person commissioning you, it is a binding document that helps to clarify the relationship between you both. When producing an estimate, you should always feel able to negotiate, even if you are just starting out or the client is a friend, relative or teacher. Should your client change the project requirements along the way, make sure you re-issue an estimate in recognition of those changes. If you don’t, your client may decide not to pay for your extra work.

When writing an estimate, use simple language. You may want to use footnotes to explicate technical terms.

If you are producing an estimate for someone you want to work with but who can’t pay market rates, state the full price on the estimate and then give them a reduction. Stating the full price as well as the reduction helps to make the people you work with aware of the value of the work you produce for them, even if you don’t charge them fully. This awareness might help sustain a smoother working relationship.

When preparing an estimate, you might also want to propose different price-quality options for your potential client: good, better, best. This way, your client can chose the kind of service that suits him/her.

An estimate should include the following:

• your contact details
• your potential client’s contact details
• a short description of the project
• a list of project tasks and their respective costs (such as consultancy, research, concept development, drafts, designs, revision, overseeing of production process, additional costs); when stating the final price, make sure to note the kind of taxes that need to be calculated on top of these; according to the country you work in, you may also want to include the right of use in the estimate;
• dates for project deadline(s)
• final deliverables (exhibition installation, live html-website, …)
• your terms of payment
• how many design proposals you will deliver and how many revisions are included in the price
• the hourly fee for any out-of-scope tasks and for any additional features, for example, your hourly fee for post-launch website maintenance
• you may want to include Terms & Conditions of service as additional protection against over-exploitation and to keep the agreement clear between you and those who commission you (according to the client and the size of the project, the size and detail of the terms and conditions section will vary)
•space for your client’s signature

Set phrases you may want to use in your estimate:

a) Process includes presentation of two to three design options, two rounds of client and design revisions.
(It is your decision when pricing as to how many options and revisions you include, but the numbers included here can serve as guidelines.)
b) This figure is an estimate, not a quote. It is based on the information provided, and may be inappropriate if additional information is forthcoming, or specifications change.
c) Additional materials, meetings, changes/fixes outside of those allotted above will be billed at xx€/hour.
d) Additional revisions or requests for starting over will result in a change order and additional fees.
e) If you want to increase or decrease the scope of the services described above, or want to add additional services, such changes are required to be mutually agreed to in writing and attached to this agreement as an addendum.
f) The estimate is valid for 30 days.
g) Terms of payment: 50% deposit to start and 50% on completion. 5% interest charged if final payment is not made within 30 days.

Last edit: 19.05.2014