How do I value intellectual property and educational materials?
September 24, 2018 7:25 AM   Subscribe

I've been asked to create a new certification course to be used internationally. How do I calculate my consultancy fees?


I've tried googling few different search terms but I think I'm missing the specific phrase/jargon that would get me the results I'm looking for.

I've been tapped by a private organization to create a new certification course to be used internationally. I have no idea what standard practices are for calculating my fees on something like this.

The course will probably be run multiple times a year and will require instructor training and periodic updates. I can calculate how much the organization will probably net when they run the course and can roughly estimate how often they will run it.

I'm just not sure how to quantify my asking price. I'm not interested in royalties or getting a percentage of their earning. I'd really just like to get a lump sum or a series of payments based on delivery. How do I begin this process?

1. Do I just name an hourly fee and then estimate the hours required and work from there?
2. Do I try to estimate how much they will make from the course and name a percentage?
3. Is there some sort of industry rule of thumb for this sort of content creation?
4. Is there a set format for requesting payments? IE An advance, a payment at 50% completion and a final payment on delivery?

Maybe I'm not even asking the right questions. Please let me know if there's a decent resource to point me in the right direction.

posted by Telf to Work & Money (5 answers total) 1 user marked this as a favorite
I don't know about your industry, but yes, I'd start with an hourly rate and an estimate of how long it'll take you. Be very specific, when you're figuring this out, what kinds of inputs you'll be getting, how much review the client will have (are they going to get to request edits to your work? How many rounds of edits? How detailed?), and what kind of outputs they're expecting.

Like, do they have a specific outline, or a general topic area that you'll have to research to decide what goes in? What is the timeline of the project? If they want it done in two months, but they want to review every draft, make sure you're building their turnaround time into the plan. If they spend a week sitting on your drafts, that's a week that you're not accruing hours, but also probably not earning other money.

So yeah, calculate how many hours you expect it to take, then round up for safety. Calculate a per-hour rate, depending on your expertise; maybe you'll go with $75/hour. Figure out that amount, then round it up. And make sure you discuss your inputs into the estimate and make it clear what they're getting for that money, and that if the scope of the project changes (extra rounds of review; more materials required at the end), then so does your price.

Source: I have worked as contractor occasionally, and I've hired literally hundreds of contractors for various things.
posted by gideonfrog at 11:22 AM on September 24, 2018 [1 favorite]

Are you developing and organising the content like, say, it's lessons about sharks and day one we teach habitat, day two anatomy, day three prey...etc (so, a subject matter expert). Or are you developing the delivery system (eg a series of videos and PowerPoint slides) as an instructional designer would. Or maybe both? If you are an ID there are rules of thumb for how many hours it will take you to develop one hour of content. So, an hour of VR would take you something like 450 (or more) hours to develop, where an hour of slides will take you closer to 10 hours of development. These are not hard rules obviously, but if the formulas would be helpful for you I can pass them along.
posted by eisforcool at 6:01 AM on September 26, 2018 [1 favorite]

Thanks for the clarifying questions. I'd be more of an SME in this case but will be providing slides.

PS I like the sharks example.
posted by Telf at 6:50 AM on September 26, 2018

Ok, I can offer the ID wisdom for scheduling (and leave it to you to work out your pay rate).

Carliner in Training Design Basics 2nd ed gives the following estimates (having referred to research by Brian Chapman, Karl Kapp and Robyn Delice):

-Workbook courses, 4-6hrs work per page of book
-Webinar, 40-80hrs per hour of finished instruction
-basic online e-learning course, 79hrs per hour of finished instruction

These numbers can seem high but factor in every part of your work: communication, a needs analysis, planning, design, first draft and review, second draft and review, production (of physical materials if necessary) etc.

He also suggests adding in a fudge factor/contingency for later edits or modification of 10-20% for stable subject matter.

Also to consider: will you hire other people to work on this? You should factor in overhead time for this. Some add holiday-sickdays-vacation time of 15% as well (companies usually need to).

Remember these are estimates. You will learn your own schedule, obviously.

Assuming you are developing a basic e learning course your math could look something like this:
13weeks of 2hour courses (assuming here) times 79hours of work times 10% fudge factor (content stable/few edits)= 2 260hrs of work (then times your rate).

Hope this helps one way or another.
posted by eisforcool at 8:44 AM on September 27, 2018 [1 favorite]

This is excellent! Thanks so much.
posted by Telf at 4:30 AM on September 29, 2018

« Older Quiet place to meet bio-dad for the first time...   |   Trick or treat, trick or treat, give us something... Newer »

You are not logged in, either login or create an account to post comments