Question

Topic: Other

How To Calculating Production Cost?

Posted by emac_t on 5/1/2012 at 2:32 AM ET 250 Points
Dear all,

I'm a Creative graphic designer, running my own design house for the last 4 years. It has been a one man show most of the time. I hire photographers and copy writers for certain projects.

Recently I talked to a marketing personal where he will bring in clients and provide some branding ideas to sell the creatives which i produce. He suggested to share profit as 65% for me and 35% for marketing. that is after reducing copywriter/photographer/traveling costs. But I do have other costs involved like Computer time (wear and tear/software upgrading etc, Electricity, phone calls and internet and rent. Since I'm already doing my own clients work and slot in what ever jobs that this marketer brings it difficult to calculate that expense. But I want to put a price for it. how can this be done?

I will be happy to answer any further questions.

Thank you.

for things that we outsource like printing we share 50-50. which is apart from design services.

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RESPONSES

  • Posted by Jay Hamilton-Roth on 5/1/2012 at 8:45 AM Accepted
    The costs you're quoting are part of what your fee already covers. Don't get too focused on nickel-and-diming the relationship. Focus on the quality of the customer, the partnership value, and long-term benefits.
  • Posted by Peter (henna gaijin) on 5/1/2012 at 12:31 PM Accepted
    I am with Jay. Just focus on the easily trackable variable costs that go directly with that customer. Basically, the money you spend directly related to that customer, but not the money you spend to keep the business running.

    The overhead costs (rent, utilities, etc.) should be part of your 65%. Only exception is if there are long distance calls/fax for that client, those can be billed (though if it is just a few bucks, I probably wouldn't). Keep it simple, and don't make your partner think you are nickel and diming.
  • Posted by emac_t on 5/2/2012 at 2:05 AM Author
    Thanks for the response, I certainly don't want to be nickel and diming. will it be ok to charge atleast 6% for the production cost from the total bill which we produce to the client.
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