Retainer Fee??

Final Design Studios

Final Design Studios

Veteran
No this thas nothing to do with teeth.

My boss (for the next week and half anyway) asked me about doing a retainer fee. Because I'm quitting and striking out on my own freelance, they were thinking about paying me a sum of money that ensured them as my top priority.

Then that fee would be subtracted from any jobs that I do. Now, they sell ads for about 800-900 bucks a pop. So how much do you think I should make this retainer fee? Or should I do it at all?

The the thing is, its garanteed income every month, that I will need at sometime or another. any thoughts?
 
My thought is--that rocks.:thumbsup: It's works to everyone's advantage, but particularly yours at this point in your freelance career. It's a nice steady source of income and it's keeps the client in the lovely habit of paying you on a regular basis. Also, if they're paying you a retainer, they're likely to give you more work--figuring they're paying you anyway. The only caveat is that you don't want your freelancing to become like another version of working full-time for the same company.

You need to figure out what the monthly fee should be--maybe estimate your total projected yearly work for the client and peg the retainer at 25-50% of the total. So, say your projected amount of work is $24,000 for the year--you could ask for $500-$1000/month as the retainer. You need to have a very specific contract agreement spelled out and the time should be limited--like six to twelve months. Also, the whole agreement should reset at the end of the contract. You shouldn't have to pay back unused retainer fees. If they make a committment to a certain amount of work and provide less than 50% (or 25%) of that work, it shouldn't be on your shoulders to pay back any of the retainer.

You also need to handle billing carefully. Say you're one month into the agreement and they give you a big job that costs way over what you've collected so far as a retainer fee. You can't be expected to do the whole job upfront and take 6 months to recoup the costs through your monthly retainer. If you use up the retainer fees, the work should stop unless you get additional payments/retainer fees. No one can tell you eaxactly how to set up your contract, I'm just giving you some things to think about.
 
Hey Bob!

That does rock. A college buddy of mine does networks and computer service for small enterprise clients and handles billing much the same way. A typical customer may need him 25 Hours a month, so his retainer is based on that. It's a fixed amount every month and they aren't given "rollover time" So, if they only use his services 20 hours in one month, that extra 5 hours doesn't carry on to the next month. It starts fresh each month. But, say if he works 30 hours, then he's compensated over and above the retainer, based on his hourly rate. So, it's a good deal for them as they don't need to be concerned about his availability and it's a consistent paycheck for my friend who plays guitar in a rock band the rest of the time. meh. Good luck.
 
Go for the retainer. I did freelance design for an Alaskan Cruiseline (hey that's right up your alley) and they paid a retainer. It's good to know you've got it to fall back on. The advice Barry S gave sounds good. I'm bad with numbers.

Good luck going out on your own. Exciting stuff!
 
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