The Perfect Bid

How much should you bid for that new project?

For a workshop presented at the 2010 APMM Conference in Boston, we hired and worked with Garth Sundem, author of "Geek Logik: 50 Foolproof Equations for Everyday Life" (which is both insightful and hilarious) to prepare an algebraic equation to help with quoting model making jobs. The variables were explained to him and he created this equation that weighs the influence on your bid of each variable. It could be just eye-candy to hang up on the wall, a potentially helpful tool for a tough bid, a contender for the Nobel Prize in Economics, or all three!

How much should you bid? The answer is: it's complex.

If the client wants it yesterday and you're already slammed, you can ask for their firstborn. But if the client's pinching pennies and you need the work to feed your firstborn, you might consider lowering your bid to make sure you get the gig. And those are only two of many, many factors.

That's why model pricing has always been a bit more art than science - Until now!

This equation starts with your baseline cost — factoring in labor, materials, overhead—and then compares your leverage over the client, to your client's leverage over you. This equation could as much as double or halve the baseline cost. (Are you an extreme pricer? —simply square the entire equation to make the range greater). Replace the letters in the equation above with numbers, as described below. Then solve to find the perfect bid!

Starting Amount:

• B = the baseline amount you'd charge for this job, without considering client, deadline, or extraneous factors. This amount should include some profit for you because if the leverage evens out you still need to make money! When the two numbers inside the brackets are multiplied at the end, it should be a number between 0.5 and 1.5 (without squaring the equation). You multiply this value by B to get $.

The client's advantages over you: 

• LC = Client's leverage: % of your total work that's for this client
• TC = In years (or fraction thereof), the length of Time you've had this Client
• PY = How Prestigious would this job be for You? Enter 1-10 with 10 being "to be seen in a Super Bowl commercial".
• DY = Your Desperation: Enter 1-10 with 1 being "don't really need the work and it's nice out", 4 being "fits a hole in the schedule", and 10 being "would be the schedule."

Your advantages over the client: 

• LY = Your Leverage: % of client's work of this type that you do
• DC = Client Desperation: take into account the deadline and project's importance to Client. Enter 1-10 with 10 being "Original model destroyed at client drunken office party, Madison Square Garden already booked for unveiling.”
• PC = How Prestigious will the model(s) be for the Client? Enter 1-10 with 10 being "They booked Madison Square Garden!"
• TY = Years (or fraction thereof) you've been in business.

Bonus Factors: 

• I = How Influential/Important is this client? Enter 1-10 with 10 being an "Apple" and 1 being "junior co-worker's cousin".
• E = How Enjoyable will this project be? Enter 1-10 with 10 being "Other models will be brought in to be photographed with our model - but they will be supermodels!", 5 being “It’s a living.” and 1 being “Better lay in a supply of aspirin, coffee and band-aides”.
• K = The number of other perks such as client-provided meals, travel and collateral; access to cool stuff, etc.
• X = Can you buy any nice tools, equipment or materials on the client's tab for this project that you'll get to keep afterwards? Enter 1 for yes and 0 for no.
• CB = How do we compare with the Competitive Bidder? Enter 0-10 with 10 being "they are so cheap there oughta be a law"; 5 being "a battle of equals"; and 0 being "no other bids, woo-hoo!"

APMM members have access to an Excel worksheet so they don’t have to know algebra to get their results – which is just one of the many benefits of joining the APMM!

Download the Excel Spreadsheet