What’s your time worth? Putting a value on your design skills
You’ve decided to go for it. You’ve got the talent and determination. You know your skills are marketable. So what do you charge for your services? Even more important – what will a client pay?
For most Creatives it would be easier to figure out the national debt. Not surprisingly a lot of designers have no clue what they’re worth in the current advertising marketplace. That’s why they’re not accountants.
But if you’re going to be profitable, being compensated fairly and adequately can make all the difference to your success. Or lack of it.
Factor in all the variables
There are a lot of things to consider when you’re setting up a fee schedule: your location, the economy, your competition, your experience, your length of time in business and of course the client. All of these should influence your decision.
No one can tell you what to charge, but here are some basic guidelines on how to present yourself and your value to potential clients:
— Design flexibility into your rates —
Charging By the Hour
This is by far the simplest way to charge for your time. And its one that most clients (big and small) can relate to. Start by checking out the competition. If you’re going to be a Web-based business, do a thorough online search of other graphic design shops or freelancers offering comparable services.
Contact them. Get real prices. Have them send you a rate card if they have it. Or call design shops in your city, pretend to be potential client (a small stretch). Ask what they would charge for a single ad, for a one-time campaign, for an on-going project (like a newsletter), or any other type of project you might be find yourself handling.
Give Me a Number: So what can you really charge? Top freelance designers in today’s market can ask anywhere from $75 to $150 an hour. Those who are less experienced usually pull in from $35 to $65 an hour. Bigger companies are more likely to pay the high end rates. If you’re unsure, ask for their “standard” freelance rate and negotiate up or down from there. And of course, remember to price yourself competitively (depending on what you gleaned from your research).
Speed is everything: Keep in mind that speed is a ‘make it or break it’ factor when you charge by the hour. If you’re too slow, you may end up losing your shirt by having to cut time if the client balks at the price. On the other hand, you shouldn’t be penalized for being fast. If you can turn a job around super quick, pad your time to make sure you’re not getting hosed.
Charging By the Project
There are usually two types of jobs designers choose to price by the project:
1) Specific pieces: When you specialize in only a few design services, say creating small space print ads or corporate I.D.packages (business cards, letterhead, etc.), it’s easier to offer a flat fee based on the project. This works great for single jobs like brochures and even Web sites, rather than multi-media campaigns.
2) Complex projects: When a job involves in-depth creative, with a considerable amount of back and forth communication between a designer and a client, usually it’s priced by the project. Mainly because it’s easier to estimate time for a large project as a whole, instead of tracking dozens of smaller increments of time. Plus, clients concerned about hours racking up are more comfortable when they know there’s a cap on their spending.
What’s the catch?
You’ve got to have enough experience to know how much time it takes to create a piece of advertising in order to put a profitable price on the job. Guessing is not a good idea. Leaving the number of hours open-ended is also not smart.
Stick with hourly rates unless you’re 99 percent sure you can estimate accurately. And even then, always specify “up to a certain number of hours” in your client agreement. This tends to curb unnecessary client revisions.
What are designers getting paid?
Small one-man shops are charging anywhere from $5,000 to $15,000 for Web site design (depending on whether or not it includes HTML production). For a big company that’s a drop in a bucket compared to paying $700,000 to a major agency. But remember, it’s still a considerable chunk of change to a fellow small business owner.
Magazine ads can run from $500 to $1,000 for design alone. Letterhead packages can start at $2,500 dollars. Newsletters at $5,000. And design for 4-color brochures can range from $2,000 to $10,000. Of course, these are starting points. Pricing really depends on what your market will bear, which only you can determine through research and some trial and error.
On a monthly retainer
This can be a sweet deal if you have a solid relationship with a client and you have ongoing projects that demand a set amount of your design time every month. Like a Newsletter. Or monthly Web site maintenance.
Unless you’re a major agency, a retainer arrangement usually evolves as the need arises. Clients are generally more receptive to paying a monthly fee for ad services after they’ve come to depend on you for a while.
Once you’ve established a level of trust, suggest a retainer fee based on the number of hours you dedicate to their projects. But don’t get crazy. It’s better to have a steady $1,000 a month for updating a newsletter than getting $5,000 once or twice until the client decides your price is too high and takes it in-house.
Before you do any trade-out, ask yourself two questions. a.) Do you really need the services you’re trading out for? and b.) Will doing the work help you network your business at some point? If the answer is yes (to at least one of the questions), you’re good to go. Otherwise steer clear, so you don’t spend your valuable time on stuff that isn’t going to further your bottomline.
When you’re the new kid
Remember, if you don’t have much in the way of a portfolio, you’re going to have to give more to get your foot in the door. Most clients will expect some sort of price break to make up for the risk of working with someone who is an unproven commodity.
Get the client first, you can always increase your rates down the road, once they’re familiar with your quality and turn-around time, etc. That doesn’t mean you should work for slave wages, if you charge too little, clients won’t value your brain power, which after all, is what you’re selling.
E-Commerce Creative Manager
AEGON Direct Marketing Services