3 Tips for Estimating Accuracy at your Creative Agency
Read time: 2 minutes
The lifeblood of any advertising or creative agency is winning business. Equally as important is putting together a proposal that ensures profitability. So, how do you tackle creating an estimate when there are so many unknown variables like last minute client changes, having to outsource work, staff availability, and additional expenses?
Outlining the steps to complete a job is the first step in building your estimate, but in order to come up with the most accurate number of hours, ensure that you are billing out at the most appropriate rate, and to protect yourself against over-runs we recommend the following:
Start with your timeline:
Factoring in all of the time spent on internal to-do items/tasks at every step of the job will help you to calculate the total number of true hours that will be spent on the job. Often what we show on the client-facing estimate are the big picture buckets of time or steps to complete the work. So, putting together a timeline that shows all of the internal to-do items will help you calculate the total number of hours at each step.
Using an agency management software that will allow you to estimate using a roll rate will help to build a more accurate estimate. You might not know which designer you will have working on a component of the job, but estimating whether it is a junior or senior designer will have a huge impact on the estimated total.
Whether you invoice your client on the estimated amount of time, the actual amount of time spent on the job, or a combination of both, it is important to include appropriate terms and conditions that will protect you from inevitable over-runs. Include the time period the estimate is valid for and details about how variations will be costed. Lastly, it is advisable to include the estimated total is “subject to change”.