How much should you charge for design?
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How much should you charge for design?
By Lior Frenkel · Business · Jan 29, 2015
How many times have you asked yourself this question?
A potential client wants your proposal for a design project. You’re sitting in front of your computer, scratching your head. You ask Google, your friends in Facebook, your Linkedin groups. You browse designers’ forums. You’ve found some price lists. Are they relevant for you? Are they relevant for this particular project? Can you use it as is?
You then think of your former projects. You charged x for a website design, and y for creating those restaurant menus. What can you deduce from this? You’re not sure. And indeed, how much should you charge? This must be the single most frequent question creative freelancers ask; and it seems like no one out there is sure what to do.
What’s wrong with price lists?
I used to have my own fixed price list:
A logo design = $xx
A wordpress website design with 5 templates = $yy
Mobile design for an app =$zz
and so on… (It’s more detailed of course, but you get the point.)
My price list was based on what I charged for my former projects, and on data my colleagues shared with me. Once in a while I updated it. Many freelancers and design studios I know use such a price list, so I thought I should too.
One day, sitting at my favourite cafe, Shelly the waitress approached me…
“You’re building websites, right?”, she asked.
“Sure”, I said.
“So… I’m in a band. We need a simple website. How much would you charge for building us one?”
She put on her cutest face.
“Well, I usually take…”
I couldn’t finish that sentence. I knew exactly how much a waitress earned in this cafe. So I knew she couldn’t afford my services.
“Listen, let’s sit together for an hour or two. I’ll show you how you can build your own website for free. There are a few platforms for just what you need.”
I felt bad asking her for money.
Walking out the cafe that day, I understood something about pricing. I couldn’t ask hipster-musician Shelly for her money. But if the manager of a large company would ask me to build him a website, I should charge him twice my usual rates. Why? because he has the money. Just like Shelly doesn’t.
These are values I have – and they are not included in my pricing as a factor. I do not consider myself a socialist or something, I just want money from whoever has it.
There are many factors we forget to include in our pricing.
“I wouldn’t do it for a million bucks”
We all have red lines. Things we’d never do – not even for a million bucks. Well… as Demi Moore showed us in Indecent Proposal, that is arguable.
What do you do when you need to write a proposal for a project that will make you hate yourself? I’ll tell you what I do. I give it a sky-high price.
For example, I have a personal problem with dating websites. I think they are awful. So if someone asks me to build one, I would price it really high. So high, that I would probably not get the job. I don’t feel bad if I lose this project, because I didn’t want to do it anyway. And what if the client wants to pay me that much? Well, then I might be able to quiet my inner voice. Just to be honest, I do have a real red line. It’s gambling websites. Those make me puke, and not even a million dollars will change my mind. I mean, not even half a million. Or is it $100K?
This principle goes the other way, too. When someone offers me a project that could change my life – I price it not-so-high. In order to work with people I admire, I’m willing to use my lowest rates. It’s worth more than the money. Though, I’d still ask for what I need to survive. I can’t be creative when I imagine my landlord’s face in front of me.
Money can motivate me get out of bed
Sometimes I need to send a proposal for a super boring project. I can’t imagine waking up in the morning to this boredom. Like when I had to build a news website for some old guys in Washington. They were nice people, but the website wasn’t anything cool or funky. Quite the opposite.
Should I turn it down just because it’s boring? Not at all. If I get enough money, I’ll have the motivation to get up in the morning and start working. And vice versa: if this is an awesome project, I can live with less. My motivation is then built from loving what I’m doing.
And what about my reputation? Don’t forget that the projects you’re working on are the ones you’ll have in your portfolio. Those projects will attract the same type of clients. As they say: “shitty projects attract shitty clients”. So I’m charging more to work on a project that I won’t put in my portfolio. I have to compensate myself for not doing something that can push my career forward.
I mean, it’s not like I’m telling the client, “Your project bores me, hence I want twice the money.” Instead, I’m just taking a risk by putting a higher price. If I lose it – maybe it’s for the best. At least now I’m free to hear about other opportunities. And if I get the project, I’m paid well enough to give up other potential projects.
“How much should I charge?”
So I’m not using price lists anymore. How do I calculate my prices then? With three simple steps:
I have calculated my hourly rate. This is the rate I need to get in order to maintain my lifestyle.
I then estimate the amount of hours I need to work on this project. I add extra hours for meetings, emails, change requests, etc. In my case I use 30% extra for the overhead.
Then I add the rest of the factors, just like I described before. Is it a boring project or a dreamy one? Will I use it in my portfolio, or would I hate myself for doing this?
“You should take yourself more seriously”, a Zen monk once told me. The biggest problem with using a price list is that it doesn’t include you in the picture. You are not a robot. Don’t price your work without including factors that take into account your feelings, motivation, and the value of your future.
It’s high time you started pricing like a pro.