working on retainer

[Chad Warner]

We have recently been contacted by a firm that we do a bit of work for and they are interested in putting us on retainer (meaning they pay us a set monthly fee and we do a set amount of work).

 

Having no experience with this type of working relationship, I was hoping someone out there has experience, and would like to share any info they can regarding the terms they set up......did you work hourly, per job, etc.

 

Thanks!

 

-Chad

[Frosty]

Its interesting that you bring this up Chad as I recently interviewd with a firm that asked if I would do this. I found it a bit unusual and said I had never been asked that before.

[Chad Warner]

I like the idea of a retainer simply because it is gauranteed income. I just don't know the logistics of it, mainly because it seems the marketing firms who primarily work on retainer work on an hourly basis, where as we mainly work on a project basis.

 

-Chad

[Jeff Mottle]

Smoothe get's put in retainer every now and then. What is means is that the client pays X number of dollars for X number of hours or potential work per month. If they have work, then you get the work done regardless of your existing projects. You need to be able to have a resource ready at their disposal almost right away. That is what they are paying for.

 

You still need to let them know how much of their "budget" will be used on a given project and likely they will get a prefered rate as well.

[kainoa]

Sorry, im kinda ignorant to the "retainer" idea (i thought it only pertained to lawyers). Im curious:

 

• What if you only recieve little to no work for a given month? Do you still recieve your set monthly payment?
  
• On the flip side, what if you recieve an excessive amount of work in one month? Do you get the same set amount, or do you charge them for the extra hours?
  

 

TIA!

[Jeff Mottle]

• What if you only recieve little to no work for a given month? Do you still recieve your set monthly payment?
  

They still pay regarless if there is no work that month, that is what a retainer is. They are retaining your services when they need you. Not when your schedule permits.

 

• On the flip side, what if you recieve an excessive amount of work in one month? Do you get the same set amount, or do you charge them for the extra hours?
  

You make sure that you limit the hours available in the retainer. The number of hours and the rate the pay would go hand in hand. If they go over the pre-set hours then they would pay a pre-established rate, or depending upon the contract allow them to carry hours forward. As I mentioned before the per hour rate they get for paying a retainer would almost always be less than if they just contracted you on a per job basis.

 

The advantages for the client is they know they have staff at their disposal any time they need them (little to no ramp up time), and they will get a discount on the work you do for them. Typically clients that want a retainer are expecting to do a large ammout of work with you.

 

The advantages for you are a guranteed pre-established income. Depending upon how much work they are retaining you for, how big your studio is and other financial factors you may be able to hire another employee. When they are not being used for the retainer work, they are esentially a free resource your your other jobs, until the retained client sends in more work. (ie more profit for you for other jobs)

[kainoa]

Ahhh...the clouds are parting. Thanks for the info Jeff, another arrangement to thinkg about. Cheers!