Hi tinmanton, welcome to the forum. I'm not sure what you mean by retainer but most of us charge half up front for our work as specified by our contracts, then the other half at delivery.

I think some places charge a retainer that's usually enough to cover a number of people's salaries for the year. Say you're Charging X per hour. Average number of hours you put in for work over the course of a year at 40 hrs. per week comes out to be about 2000. My impression of the way it works is that you decide, say, 3 people are going to be dedicated to a particular client. So a fair retainer to charge for that would be 6000x (number of hours for 3 full time employees times the hourly rate). Of course the retainer could only be based on a a 3 or 6 month schedule, less or more employees.

Basically, its a good option to propose if you're doing numerous projects for a client, as it saves time by eliminating the estimation and billing process for each individual project, and expedites getting started on projects (no waiting for a PO or approval of an estimate). The only time it gets dicey is if, during the course of the year, you wind up exceeding the budget boundaries established when the retainer was drafted - but there should be contingency clauses for such occurences.

I've personally never been involved with a retainer structured business relationship, but I imagine that it, like many other things, is only as complicated as you want it to be.

I have my magazine clients on retainer. They send me X amount per month - I base it on the hourly like LBA above said, figure out roughly how much time each issue takes, figure out the total cost, and that's what they pay me every month. Some months it is worth it, sometimes there is more work than others but it seems to balance out. I do keep track of how many hours I put in for this client every month so I can make SURE things are balancing out, because if they are not it is time to renegotiate.

The Creative Business Guide to Running A Graphic Design Business touches on this subject - the pros and the cons of having a client that keeps you on retainer.

Thank you very much for enlightening me in the issue. It's really great having to hear from other designers.


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