How Does a Monthly Retainer Work?
A monthly retainer is a custom contract created by contractors, i.e., consultants, lawyers, or any other type of professional service providers, and offered to the client in exchange for the contractor’s services on a longer project. The client reviews the retainer offer and negotiates with the contractor or accepts their offer right away.
The monthly retainer represents only a fraction of the entire project pay, but instead of tracking work hours to bill clients, contractors receive a predetermined monthly sum for the work they’ve done so far on the ongoing project.
While retainers are usually paid after the first month’s work, they can also be paid upfront as a down payment and a show of good faith. That said, retainers don’t always have to be on a monthly level. Based on mutual agreement, clients might pay weekly, quarterly, or annual retainers.
How Are Monthly Retainers Created?
Creating a monthly retainer usually comes in 4 stages, during which the contractors:
- Get to know their clients
- Build their offering toward the client
- Sell contractor services
- Scale contractor services
Getting to Know the Client
Before a contractor enters into a monthly retainer agreement, it’s very important that they get to know their clients and learn about the type of services they need on a regular basis.
In most cases, the contractor and the potential client sit down for a meeting, either in person or online, and discuss the project scope, timeline, and other project information, and how the contractor’s services might satisfy the project needs of the client.
Creating a Contractor Offering
Once they familiarize themselves with the potential client and their needs, the contractor creates a monthly retainer offer where they define the types of services they would offer for the client and the estimated rate for those services.
Selling Contractor Services
Next, the contractor pitches their monthly retainer offer and tries to persuade the client that they’ll be a good fit.
Scaling Contractor Services
After the contractor lands the retainer and their offer is accepted, the contractor usually scales their services to optimize their work hours and allocate an appropriate amount of work hours towards their new project on a daily basis.
The contractor also divides the project tasks into categories ranging from easy to harder tasks and creates a work schedule for the following month, i.e., for the upcoming monthly retainer.
Contractors frequently use client feedback as it helps them create future retainers for similar clients and future tasks.
How Are Monthly Retainers Managed?
Managing the Scope of Work
The management of the contractor’s scope of work is a key step in managing a monthly retainer. For example, the contractor can talk with their clients to set some expectations depending on the services they offer (e.g., content writing, consulting, etc.). Once the contractor sets the expectations, they can define the work they’ll be doing in the following months or until the project ends.
Using Time Tracking Software
A time tracking software allows contractors that work on a monthly retainer to keep track of their work hours for themselves and see which tasks take up the bulk of their hours to create a better task schedule for future projects.