🔥25 new Activity icons inside the Iconuioo Icon Pack (1600+ icons). Check them
If you’ve decided to design professionally, congratulations. It’s not an easy task to do and many designers have to step out of their comfort zone. Pricing is one of the areas where they fail most often. They don’t really know how much they should charge the client. Going to a forum to check how much other professionals charge doesn’t help at all. Everybody’s work and the values they bring are different, so there’s not a one-size-fits-all solution.
To be honest, I’ve been there as well. I didn’t have an idea about what I should really consider when establishing my rates. I have sent many price estimates only to find out later that they were completely wrong.
That changed when I started to deeply analyze the work that I do. Firstly, I clarified how much money I actually need to cover my expenses and make profit at the same time. Keep in mind that the expenses include taxes, software and subscriptions, phone and internet, courses etc. Then I moved on to consider everything I will outline in this article.
Hopefully, the information will help you decide for a rate that is appropriate for your needs, reflecting your experience and acceptable for the client.
If you don’t know the value of your work, you won’t be able to tell what it’s worth. This is not something that only beginners struggle with. Even designers with several years of practice fail to recognize the value they bring to the clients. Usually because they are so overwhelmed with work that they don’t have a moment to stop and really think about it.
To figure out the value, you also need a bit of confidence. Underestimating yourself is never good, especially when it comes to larger scale clients. These usually have a bigger budget for the project and higher expectations. If you send this client a price offer that is too low, they may start thinking that your value is low as well. Because of that, they conclude a contract with a more expensive designer, even though the value they bring might be absolutely the same as yours.
As I said, going to a forum or Facebook to check the price of other designers to get inspired is no good. Imagine offering this rate and a potential client asking you about what it consists of and why they should pay this much. Now, you are at a dead end, because you can’t justify it. This makes you look unprofessional and unreliable.
With time and practice, you should get a clearer picture about the value you bring. There is no shortcut. Don’t hesitate to contact the clients you’ve done some work for asking about the benefits your outcome has brought them. Without feedback, this task is impossible to do.
Everybody’s story and background is a bit different and pricing should reflect that. If you’re a freelancer, never compare your price with the rates of agencies and employed designers. An employee has a much lower rate. They don’t have to look for clients and don’t pay for the equipment, apps, electricity and more costs that a freelancer must consider when compiling a pricing strategy.
If you calculate the rate of someone employed in a design studio, you might think that you couldn’t get by with this amount. However, realize that the money the employee makes is net profit. They can do anything with it – and without further worries that include dealing with taxes.
Another extreme is when you compare yourself with the prices of agencies. These are going to be much higher than a regular freelancer’s. This is because of the costs they have to take care of. They have to pay their employees, offices rental and much more that sometimes vary to a great extent.
If you’re sure that you do better work than agencies, go on and set an even higher rate. However, you will have to be able to justify it. If your justification makes sense to the client and they are sure of your quality, you’ll get the job.
When analyzing your work and compiling the pricing strategy, you’re going to have to decide whether you will charge the clients an hourly rate or a per-project flat rate. Both of these methods have their benefits as well as drawbacks.
This method is very common because of its simplicity and suitability for beginners.
The main benefit of it is that you get paid in direct proportion to the volume of work that you do. I recommend charging per hour when working with a new client that may request for multiple adjustments. You will get paid for the time spent on doing this extra work.
The obvious drawback to this method is that you can get penalized for working efficiently. The more experienced you are, the faster you work. It just doesn’t make sense to earn less for getting more proficient at something. Don’t go for the hourly rate when working on a project that brings high value to the client.
Pro tip: Looking for a tool to track your time? I personally use TMetric that has both a free and a premium version. This app comes with many additional features for team, project and task management. If you just need to track the time and report it to the client, you can get by with Toggl just fine.
This method is all about setting one rate for the whole project. Designers that have a lot of experience often prefer this, even though it’s not always the best option.
Charging per project makes sense because you won’t lose out on earning potential for working efficiently. Also, the client knows how much money it’s going to cost them in advance. They won’t get an invoice for an amount they weren’t expecting.
It’s not that convenient when the client requests more revisions than you expected. The project may also change completely midway through. This could increase the amount of work you will have to do and guess what: it’s not going to be paid.
A well executed project specification is the basis for mutual satisfaction. The work contract should be based on the specification too – meaning you are covered in case of significant changes in the project.
This method is great when the scope of work for the client is large. In this case, you don’t have to deal with acquisition of new clients for a fixed period of time. A huge part of the costs is covered by the employer and you can focus on the work itself.
The downside of this is potential insufficient variety of work. You may be assigned one or two clients that you’ll focus on only. Nevermind the fact that you might find the niche unenjoyable.
In the end, choosing the right charging method is up to you. You can also combine them based on your and the client’s needs.
I hope I have clarified some of the questions you may have had about pricing. It’s not an easy task to do. Many times, designers need a lot of experience in order to determine the rate that is profitable for both sides of the project.
Stay diligent and patient. With time, you can set the rates higher and higher – a lot of clients value experience over anything and will pay generously for the value that you bring.
Have any more tips on how to set a designer’s rate correctly? Let me know about them in the comments section!