Retainers can be one of the best ways to keep money flowing on a regular basis. But the rules can be tricky. If you’ve ever wondered how retainers should be structured, Sharon Bending of Bending Design graciously shared some information on how she handles them. Here’s what she said:
I have three clients on retainer currently and it can be a very nice thing. Some things to note about how I do them:
- the client must commit to a minimum of 6 months
- they get charged an hourly rate which is a benefit because normally I charge by the project
- we agree to a set number of hours ahead of time and they pay that full amount before the month begins (reasoning is I have to set aside the hours)
- I have a certain number of hours that is a minimum I do a retainer for (10 hours a month is the smallest I will do. Less than that is hard to get anything accomplished and you’ll spend more time checking your time than getting anything done.)
- They get a report of the hours including descriptions at month’s end so they can evaluate if they need more. I don’t even think my clients read this but they feel better knowing you are doing it. Helps them to be comfortable.
- If we are running close on hours I let them know and I always get their permission before going over.
- If we go over on hours they’re billed at a higher hourly rate.
For an example of a retainer, check out Proposal Single #12.