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  • Working on retainer

    By Danno

    Let me set the scene here.  About five years ago I was in London, living in Wembley and working from home (in my undies as usual) and I picked up new client on Elance.  It was a very small project for less than a couple hundred bucks.  The client was in the US and looking for some quick banners to meet a late deadline.  I low balled my bid knowing I could turn it around fast and I needed the cash for some bills.  One thing lead to another and I got the gig.

    Smooth out the ups and downs of freelancing by selling your time in advance Photo by Powerdruns.

    Smooth out the ups and downs of freelancing by selling your time in advance.

    I completed this little project which turned out to be the catalyst for a great working relationship and over the next five years, this client would spend over a $100k with me, all from a small two hundred dollar project.

    You see, not only do I always ask my clients for testimonials and referrals but I also check in with them every few weeks to see if they need a hand with anything.  Over a few months of doing this, my new client sent me more and more work to the point where they were using me regularly and directly and not bothering to post projects on Elance any more.

    Now, they were a young company back then and growing at a steady rate.  I wanted to make sure that some other crafty web designer didn’t come and undercut me or worse still, have them consider to hire someone full time in-house.  In order to create a win-win situation for both of us, I offered them what I call “Studio Time” which gave my client the ability to hire me on retainer.

    Here’s how I define and pitch Studio Time:

    • Client gets to retain X number of my hours per month, every month (these hours are the Studio Time)
    • Client gets to retain those hours at a discounted rate (e.g. bulk discount)

    Some of the conditions for Studio Time are as follows:

    • Client prepays for the Studio Time
    • Client can draw upon retained Studio Time hours at any time
    • Unused Studio Time hours only roll over from one month to the next
    • Studio Time hours older than two months expire

    Benefits of Studio Time

    Studio Time is great for the freelancer because:

    • It improves cash flow
    • It can often be free money if the hours expire

    Studio Time is great for the small to midsize company because:

    • It’s cheaper and easier than hiring a full time employee
    • It’s ultra convenient to have a designer “on tap”

    Consider setting up similar retainer agreements with your clients to smooth out your cash flow and have more bankable hours every month.

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    About the author

    Danno started freelancing in 1996. He is the co-founder and (ex) President of Graphics.net, owner of FeedIcons.com, EliteFreelancing.com, FastCharacters.com and SteelAndSnow.com. He digs wind, waves, guitars and circles. Follow Danno on Twitter.

    Comments on this article...

    • Web design business tips, strategy, best practices, Elite Freelancing » Blog Archive » Rockin’ it with killer customer service:

      […] this consistently with the right client and next thing you know, you’ll be in a position to sell your time on retainer. Share […]

    • Javier:

      This is interesting ideas. I have clients lots and some like to have me for available to them when they need.

    • Shawn:

      Interesting! I hadn’t thought about charging up front for this, but I’ve often pitched clients on a specific # of hours each week or month. It’s a great way to level out cashflow…

      I might just try collecting up front and arranging it as you’ve suggested.

    • Danno:

      Yeah, try it out. Working on retainer is the ultimate if you can hook it up. It’s only a viable proposition for certain types of clients (generally clients who you have some flight time with already) but a very cool win-win for everyone. The other bonus of working on retainer is if you know you have pre-sold time at $X per hour you can consider outsourcing that time at $Y and profit the difference.

    • Freelancing during economic reccession | EliteFreelancing.com - Web design business best practices and strategy:

      […] Working on retainer is one way to smooth out cash flow volatility, yet during a recession, it’s even more important to focus on providing added value to your client base and help keep your income stream healthy. […]

    • Сантехник Гоша:

      Думаю понравится любому!

    • Michelle:

      This is a great idea. One thing… about Elance. I'm really not comfortable handing over a scan of my passport or drivers license. They require that for verification now. I can't send a Utility bill as my utilities are rolled into my rent and a cell phone bill is not acceptable. How reputable is Elance?