A: Short answer: Yes. OK, OK, you might like to hear why, and maybe even how I recommend that you handle them, right? All right, here you go:
The only way to understand what is influencing a design firm's (or freelance designer's) profitability is to review business data carefully. One of the most significant measurements you can review is the difference between what you estimated for a job and what it really took to do the project. Comparing the actual time versus what you thought would be required leads to critically important knowledge about how you/your team work and how accurately you estimate. Of course, there are other meaningful things to review as well.
To do a complete project postmortem or exit review, ask yourself:
• How well did we meet the client's brief? Is the client satisfied?
• How differently was the project implemented from your planning of it? Why? Why not?
• Were there significant changes to time, scope and schedule? Did we Change Order the client for these revisions (i.e. send an amendment to our estimate and request more time/money)?
• How do the estimated design fees and out-of-pocket expenses compare with actual time and costs?
• What were the impediments to creativity and productivity? What supported these things?
• What was out profit on this project? Can we recoup any loss on a future project with this client?
• What were the unique lessons learned on this project and/or from this client relationship?
• How can we do better next time?
By the way, some project management software allows you to make this comparison easily and in real time so that you don't need to do complex financial calculations at the end of the project. This can be very valuable, and also allow you to course-correct mid-project if needed.
The Design Bitch is Terry Lee Stone, a Los Angeles-based creative manager and writer. She teaches the business of design at Art Center College of Design. She's the author of several books on design including, Managing The Design Process, published by Rockport Publishers.
Disclaimer: The general information in this column is not a substitute for personalized advice from an attorney, an insurance agent or an accountant. If you have questions regarding legal, financial or risk management issues, you should seek the services of an appropriate professional.