How to Caculate What to Charge Clients for Creative Services

Picture 20From time to time my students will email me because they are stumped when asked by a potential client (perhaps their first real paying design job) how much will they charge for design services. They are afraid if they say the wrong thing or demand too much they won’t get the job, yet they want to be paid fairly. I got an email yesterday from a student named Jamie…

Jamie wrote…

Hi Ms. Baker – “This is Jamie G. I’m not sure if you remember me but I had you for Corporate Communications and Branding. I had a question I thought you could help me answer. A sushi restaurant I work for wants me to redesign their menus for the entire restaurant including all food, drinks and dessert. I am kind of confused about the pricing aspect though and am wondering how to go about finding a decent price to tell them. They just told me yesterday about this so I have a little time to figure it out…”

Here is my recommendation:

Determine the scope of the work

My best advise is to create a short concise estimate/agreement as
to what the scope of the work is – in other words get it in writing as
to what exactly what (how many pieces, how many versions, etc.) you will be
providing for the amount that you are quoting. This keeps the client and you on the same page about what you agreed to complete for “x” amount of dollars.

Hourly rates

The next step is to determine an hourly rate that you will be satisfied receiving for the work. Hourly rates vary by state, years of experience, and frankly, how much you want to work for a specific client. Sometimes taking a little less on a job that will get you experience in an industry that you want to work in is worth it, (paying your dues) as long as you don’t feel in your gut that you are being taken advantage of.

Calculating the Price

Next you must figure out how long each task will take. Be prepared to show time sheets so the client knows what they are paying for. You
should
keep track of your time on projects even while still in school, so you have
a good idea about how long it takes you to do a design task. Otherwise
you will have to guess how long it will take you to complete the work
and
then I suggest you add on about 25% more to make sure you cover your
time. If it turns out to be less time you can adjust the bill and you
still look good to the client, because you came in under budget. You
can tell the client that it is an estimate and you like to create a
buffer, but will definitely adjust the price if you over-estimated the
cost.


Other Expenses


Clients like to know what to expect so they can budget for the expense, so hidden costs can be unsettling to them. Make sure that if you are laying out money for things like stock imagery, illustrations, photography or other items, you determine the costs and include that in the agreement. Also, determine an
hourly rate for any work they my ask for that goes over
the scope of what you agreed to in the estimate/agreement. Include that
in the
written agreement as well. For example, have an hourly rate that would
be charged for anything over the scope of the original project. 

If you
handle the printing you must charge
for your time on that as well; meaning running back and forth to the
printer, etc. Sometimes they will want to save money by handling this
themselves. You can provide a service by recommending a good printer
that is willing to work with a non-professional to ensure that the work
turns out well. But it is probably more cost effective for them to
have you handle the printing, so line up some good printers ahead of
time.

Getting paid

In terms of payment, I always ask for a third
upfront, this assures me that they are serious about the project and
are willing to make a commitment. I write in the agreement that payment
is due when I deliver the final work. In big companies you
have to get a purchase order number from their accounting department
before you start to ensure payment. Also, you probably will have to
wait for their accounts receivable (usually 30 or 60 or even 90 days)
cycle  to get paid.

Resources:

One of my favorite resources for templates for forms and contracts is Business and Legal Forms for Graphic Designers (3rd Edition) Amazon link .

Please Note:

This
post assumes that you are working from a home office and will claim % of office space used from housing costs, will depreciate your equipment and claim business expenses on your income taxes. The rates charged by professionals that run a brick and mortar design studios and maintain an full time staff are factored differently.

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