One of the most overwhelming aspects of expanding a graphic design business is deciding how much to charge your clients. You want to charge enough that you cover your expenses and honor the value of your time and skills, but you don’t want to overcharge so much that almost all of your potential clients continuously pass on your work because they can’t afford you.
Deciding your rate
Before you even begin to consider pricing, you have to think about how much you need to make each month. Besides the typical bills such as rent/mortgage, groceries, etc, it’s wise to think about all of your financial needs that are typically covered in a 9-5 job but not as a freelancer. You don’t have an employer who is matching your retirement contributions or deducting money out of paychecks to cover your insurance payment each month. It’s vital to add those expenses to your budget and make sure you’re making enough money that you can set some aside.
If you’re looking for new sheets on Amazon, are you reeeeally interested in the set that costs $12? I mean, that sounds like a steal, right?? But you already know that those sheets are going to be incredibly scratchy or rip the first time you wash them. Cheapest doesn’t mean best (but neither does most expensive). Don’t be afraid of charging higher rates. If your quoted rate never turns potential customers away, it’s too low. Do you really want to work with a client who refuses to pay more than $15 an hour to a graphic designer?
No matter what you charge, you should come to an agreement with your client before beginning the project, and ask for a deposit before you begin your work. Alleviate some of the risk of nonpayment and help hold your client accountable (better safe than sorry AND broke).
Should I charge by the hour or by the project?
There are always two options when it comes to setting your prices: charging by the hour and charging by the project.
If you’re a beginning designer, it’s reasonable to set a rate of $20-$40 per hour. That rate should go up very quickly, though. (I’m talking within months). A lot of companies will prefer to charge by the hour. It sounds ideal to them: they’re getting exactly what they pay for, right? You can go this route if it’s what you're most comfortable with, but remember, you don’t always have to be directly exchanging your time for money.
As a designer, your worth is far beyond the time it takes you to create a logo or graphic. You’re bringing your experience, any training, and your design skills. You know how to create designs that attract the eye and are aesthetically pleasing. Those are talents that many people don’t have, so don’t diminish their significance.
Charging by the project is the best way to honor your creativity and expertise. The client hired YOU because of your incredible portfolio. You bring something to the table that they can’t do. Your work will add incredible value to their business: creating brand recognition, attracting customers, and overall reflecting well on the company. If your logo design ultimately aids the company as it generates hundreds of thousands in sales, you’re going to wish you charged a lot more than $300 to design it.
When you’re pricing by the project, you can estimate how many hours you think it’ll take you to complete and multiply that by your hourly rate. Add at least 10% because you always need some sort of cushion if the project runs long. You can also research what other designers are charging for a similar job. You can also pull a number out of a magician’s hat. No seriously, because when it comes to pricing, everyone is playing by their own rules.
Think about the size of the company, the scope of the project, and even how much you like the client and the work. If talking with that client makes you want to pluck your eyelashes out one by one, you can at least charge more to make it worth your time (and pay for those eyelash replacements).
You are the freelancer, which means you are the boss and you get to make your rules. So make them what works best for you. Let me know in the comments what insights you have about pricing!