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forprotdonx19tchangewhenworkingfornot-for-protsanydiscountisacharitabledonation.Thereisnoadditionaltaxbene-tanditisoftentoanorganiza-tionthatwouldnx19totherwisebesupportedwithadonation.Althoughcommonamongcre-ativermsnot-for-protdis-countsarenotabusinessnorm.Soitraisesaquestioniflargebusinessessuchaslocalutilitiesdonx19tprovidediscountswhyshouldsmallcreativebusinessesThissaidmanycharitableorganizationsexpectanot-for-protrate.Logicasidehavingonemightbenecessarytopur-suenot-for-protclientsandgovernmentalRFQs.Whenpro-vidednot-for-protratesaretypically10to20lessthannormalrates.Volumediscounts.Thereisnoeconomyofscaleinproduc-ingcreativematerialsthuslittlenancialjusticationforbillingratereductionbasedonaclientx19svolume.Ifapricebreakmakesmarketingsenseitisbetterpro-videdasax1cfavoredclientx1dorotherreductionoffthenormalprojectprice.Retainerdiscounts.Incon-trasttotheabovereducedbillingratesdomakesensewithretaineragreements.Thisisbecausearetaineralsoguaran-teescashowandprovidingaratediscountisthetradeoffforitquidproquo.Thereductionistypically10to20.Professionaldiscounts.Othercreativermshiringanoutsiderwanttomarkupthebillatleast50.Offeringaprofes-sionaldiscountofupto25offanormalbillingratecanmakethisprotablyfeasiblebecausetherearefewifanymarketingcostsinvolved.5CreativeBusinessx14SeptemberOctober2011Lackofmarketingandequip-mentcostsalsoallowasimilarreductionwhenworkingon-siteforaclient.Tempagencyratesarenormallysetbytheagency.SURVEYCONCLUSIONSTheprecedingchartsshowaver-agemeanbillingratesasreportedbyrmsofeightdiffer-entsizes.Whatitdoesnx19tshowistwoconclusionsthatcouldonlybegainedfrominsideaccesstoallthedata.25drop.Ananalysisofthebillingratesreportedin2011showedanaverageof35lessthanthoseinthesurveyweconductedin2007.Thatsurveyhoweverwaslessstructuredanddidnx19tattempttodistinguishbetweenimaginedandactualrates.Takingthisintoaccountourcalculationisthataveragebillingrateshavedeclinedabout25inthelastfouryears.90needed.Itispossibletosurviveonaverageratesaslowas50anhourespeciallyforsingle-personrms.Butalong-termstablebusinessrequires90orhigher.Ifarmx19saverageislessitshouldbetemporary.HowcomeBecauseastablebusinesshastobeabletocovernormalbusinessexpenses.Firmsthatchargemuchlessthan90canx19t.Forinstancetheyoftenhavenomarketingcostsbecausetheyareriskilydependentononeortwoclients.Orthebusi-nessisbeingsubsidizedbyhav-ingnofacilitiescostshomeofcenobenetscostspro-videdbyaspouseortakinglowsalaries.Alsothereisusual-lynothingleftforcapitalinvest-mentorprovidingforlongtermpersonalsecurity401kfunding.Continuedfrompage2.Therewasnoattemptatgeographicsegmentation.CBx19sexperienceisthatratesandpricesvarylessthaniscom-monlybelievedparticularlyamongmajormetropolitanmar-kets.Asageneralizationthehighestratesreportedinthesurveytypifylargermarketsthelowestsmallerones.RATEVISIBILITYExceptingx1cmeterrunningx1dassignmentsmostclientsdonx19tcareaboutarmx19srates.Theycareaboutthecostoftheirproject.Giventhisthereisusuallylittlereasontodiscussbillingratesunlessasked.Bringingupthesubjectcouldencouragelookingforwaystocutbackoncertainfunctions.Ontheotherhandarmx19sbillingratesshouldneverbeamys-tery.Acknowledgingthevalueofitstimeisahallmarkofpro-fessionalismforanyservicesorganization.Surveydatashowthatalargemajorityofclientsareawareofthehourlyratesbeingchargedandhavenoproblemwiththem.Thereisanuncannysimilarityinthedatathatshowslittledifferencebetweenhowclientsofbothlargeandsmallrmsfeel.RATEEXCEPTIONSThereisseldomanynanciallogicbehinddifferentratesfordifferentclients.Abillingrateissimplyamanagementtoolthatindicateswhatarmmustchargeperhourtobeprof-itable.Thatgurerarelychangesindustrytoindustryclienttoclientorjobtojob.Anydesiretoreduceorincreasewhataclientwillenduppayingshouldbeattheprojectpricinglevel.Onlytherebycomparingwhatshouldbechargedwithadesiredchargewilltheeffectonprotabilitybeapparent.Not-for-prox1ctdiscounts.Sincearmx19scostsandneedCB25averagedropinthelastfouryears.90neededforlong-termviability.