How-To: Pricing Your Design Service

Hi! My name is Dallas … I’ve noticed quite a few people asking how to price their services. For many freelancers just starting out, it’s a HUGE question. They see these well experienced designers charging hundreds per hour … thousands for logo and branding projects. On the flip side, they see people willing to do large design projects for only a few dollars. Experienced designers know what their time is worth, and have much higher costs than someone with a laptop on the kitchen table, and in some areas of the world you can live on only a few hundred a month.

Deciding what your time is worth can be difficult, especially when just starting and with no information to go off of … however, much easier numbers to find are published by the bureau of labor statistics, census.gov and things of that nature. Average income for designers was something like $60,000 I think last I looked but, just starting out … or in higher or lower than average economic areas, how do you judge what you can, or should charge for your design service? We’ll dive into that in this guide. To follow along download the sheet from https://docs.google.com/spreadsheets/d/14ZI5xl07SGNYHkbCvxSlzoOHjimA_-rmwPKqkQWmQHo/edit?usp=sharing

First, what should you make? This is more of a general question and can vary widely based on your location and experience. I’m located in nowhere Utah and though, I’m educated and have a significant amount of experience but, my business is new … Federal Poverty Line for 2017 in a 5 person household for 2017 is $28,780 … We’re going with that because it’s the most ambiguous, yet accurate number I can get and because I believe that anyone that is working full-time should be at or above federal poverty level.

annual income and hours
Edit your annual income and hours as needed

Next, we need to figure out how many hours that you’re working. In the US a regular workweek is 40 hours but, the real question is … how many of those are “billable” hours … in my instance, I check work related emails for around … 20 minutes per day, and then check my bookkeeping on Friday’s … I try to get a new blog post up every week or so and on the 23 of the month I spend an extra maybe 30 minutes pulling funds from different accounts to pay bills. The reason why this is important, is because even though you aren’t billing those hours, you are working … and it needs to be subtracted from your billable hours so that you can arrive at a decent cost per hour.

fixed expense
Edit your expenses as needed, these are rough guesstimates of mine

I’ve broken fixed cost into monthly and annually. These numbers can be a bit deceiving actually because, if we don’t meet our fixed costs we aren’t making anything at all however, accounting for them in our bid per billable hour is the easiest way for me to break the cost down and spread it over clients throughout the year. Otherwise, you’d just charge your first client in January the $3,000 of your fixed cost, and enjoy profits all year. You can see on the sheet, I’ve got some subscription costs, I kick out some money to Adobe and Lynda, then I’m just guessing $20 on some pencils, paper … that’s probably more like $10 but, whatever. Marketing, I’ve been trying the Facebook ads, they have some very affordable options for about a buck a day. Every year I buy some camera equipment, I have some computer upgrades, you can only run on a hard drive for a few years before it starts to get scary. You’ve got to account for backup equipment too. This stuff adds up quite quickly. Now, add up all of our fixed cost, and divide that by the annual working hours. Which gives us a “Machine Cost” of $1.93 per hour

variable expense
Edit your variable cost as needed, mine are very low.

On to my lowest cost but, I’ve talked to people in Texas with power bills in the thousands. You might need to do either, some hard core math, or some pretty decent guesswork here. My power is $0.05 until I hit so many kwh, and $0.08 after that per month … but, my computer tower alone uses 800 watts, and each monitor uses a couple hundred. I also have photography bulbs that burn 100 watts each while on, and charging camera batteries and such? My guess was just to go at the 8 cents per hour … it seems pretty negligible but, that stuff adds up quite a bit after the years, and should be included … Some people even get 10 cent raises and get excited.

Project expense … I’m going to pretend that I’m printing a $40 business card project $10 shipping. Business cards don’t generally take long but, sometimes I can get a bit fussy with layout, kerning, color and things. So, between taking the order, sending it in and everything I’m going to say 3 hours.

project expense
Add on your specific project expense

Notice the numbers to the right. The first one, Break-Even, is what you need to get before you make any money, this is the amount that is going to pay the costs of ordering the cards, paying your 3 hours of electricity and the contributed fixed expense. Billable project income is what we make given our target income of $28,780 divided by our billable hours.

target based bid
This gives you your target based bid, this is what you need, this is the number that you need to achieve your income.

This gives us a target based bid of $102.15. This gives us the amount that we need to charge for the job to achieve our target income, assuming we can fill all of our “Billable Hours” with paying work.

Now, I often see people talking about Value Based Bid, and I’m actually going to entirely avoid that. If we’re “Value Based Bidding” for a mom and pop antique store who is making little to nothing, you’re adding value but, it’s not going to matter much. If it were truly value based, you’d be paid $10.

What I will talk about however, is a what I’m calling a “Value Added Bid” now, this might seem odd at first but, hear me out. If you’re designing a business card for Nike, or some huge organization, spending 3 hours of time and only $40, you aren’t going to charge the $102.15 … Well, that’s what you need to hit your revenue target, right? However, Nike brings in millions of revenue per year. This is an area where you’ve been sought out for your expertise from a business whose pocketbook deserves high quality work at a premium price tag, so you add monetary value on to the project.

value added bid
Value Added Bid

This might be an area where you’d want to look at some prior income statements to arrive at a number. Nike had revenue of $32,376,000,000 dollars in 2016. Did a business card generate these numbers? Probably not, but, I’d be willing to guess that business cards do play a role in helping generate those revenues. Let’s add some value to that, I’m going to say that maybe … $100,000 of their billions is contributed to by business cards. Now the question, how much should you gain from that? Well, firstly I wouldn’t only be spending $50 on this card anyway, I’d be getting the best beautifullest card I could find but, 10%. My guess is that they’d take this bid of $10,102.15. If they didn’t they’d either counter offer or you’d be negotiating in some way. You’ve got numbers now, you know exactly what you need to break-even, you know what you need to generate as your own income. Rather than guessing and throwing numbers at clients, you should be able to more informatively negotiate your value, cost and price. Good Luck!

As always; like, share and subscribe via e-mail or any of the social media buttons above. Have a wonderful week!

Current Reads, Resources and Inspiration

Current Reads, Resources and Inspiration

 

I was asked via Facebook for suggestions on reading and listening material. As I started collecting links and things I realized that I should probably make a new post about it.

First off, I really like this weekly series by John McWade. It’s not software specific. He covers layout, typography, color and walks through building something new every week. If you enjoy this one, he has many other courses available that are equally fantastic.
Graphic Design Tips and Tricks – John McWade
https://www.lynda.com/Color-tutorials/Graphic-Design-Tips-Tricks/365959-2.html

This is more of a personal one, I started watching this during my winter slump and the little tidbits of happiness and time management. This weekly series has benefited my personal happiness, and that of my family.
Happiness Tips – Chris Croft
https://www.lynda.com/Business-Skills-tutorials/Happiness-Tips/426767-2.html

Especially for you web designers/developers, anything from Morten Rand-Hendriksen is fantastic.
Morten Rand-Hendriksen
https://www.lynda.com/Morten-Rand-Hendriksen/725535-1.html

This course is more about branding and self promotion for your design business. Sean is very insightful and gives tips for getting and maintaining clients, getting published and staying relevant.
Running a Design Business – Sean Adams
https://www.lynda.com/Design-Business-tutorials/Running-Design-Business-Self-Promotion/432563-2.html

Another weekly series, I listen to web career clinic every week where Lauren interviews a new designers.
Web Career Clinic – Lauren Bacon
https://www.lynda.com/Web-Design-tutorials/Web-Career-Clinic/432037-2.html

I just started listening to this but, I caught up with all of them within the first day (I think we’re only on 6 weeks or something). They just kind of talk about a different design challenge every week.
The Honest Designer – Ian Barnard, Lisa Glanz and Dustin Lee
https://www.designcuts.com/tutorials/honest-designers-podcast-ep-1-developing-your-style/

Creative Workshop – David Sherwin
Creative Workshop – David Sherwin

To be honest, I only did one exercise out of either of these exercise books. They’re time consuming but, fantastic I’d imagine if you’ve got nothing to work on or need pieces for a portfolio or stuff for a blog post.

Business and Legal Forms for Graphic Designers – Crawford & Doman Bruck, Graphic Artists Guild
Business and Legal Forms for Graphic Designers – Crawford & Doman Bruck, Graphic Artists Guild

An absolute must have, anytime you’re in need of a form open this book and find an example of a form already being used. It includes a disk with all of them on it if you’re in a hurry but, personally I just build my own version of what I need.

Print Magazine http://www.printmag.com/
Print Magazine

I just like these, they’re full of inspiration and entertainment.

 

How to be a graphic designer without losing your soul – Adrian Shaughnessy
How to be a graphic designer without losing your soul – Adrian Shaughnessy

This book is fantastic, Debbie interviews a handful of fantastic successful designers and helps put some of the issues that we all face into perspective. A must read if you’re going through a slump or something.

 

Handbook of Pricing and Ethical Guidlines – Graphic Artists Guild
Handbook of Pricing and Ethical Guidlines – Graphic Artists Guild

This is a resource, it’s full of information. I doubt I’ll ever read it cover to cover, and I don’t think it’s meant to be but, for any new designer pick up this book. It’ll prove invaluable as you start facing new challenges.

The Graphic Design Exercise Book – Carolynn Knight & Jessica Glaser
The Graphic Design Exercise Book – Carolynn Knight & Jessica Glaser

Another exercise book. Maybe I’m just terrible at them or something. I’ve only worked through one of these exercises as well. However, if you’re just starting out, or just want to make things. I’d imagine this is a great resource.

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Free vector arrows

Free vector arrows

Free vector arrows
Free vector arrows
Today I thought we’d do another freebie. I was going to do another free brush but, I couldn’t think of anything really. Thought maybe another scatter brush of birds? Free vector arrows popped up in my search as something that doesn’t have a ton of download links. So, I whipped up some arrows real quick. Let me know if you’d like more or how these fit your needs.

You can grab the .eps Here: . As always, let me know what you think either through comments or through social media (links to my networks in the sidebar), and please share if you found this helpful. Thanks!

Adobe Illustrator – Free vector leaves brush

Fall leaves brush AI

Fall leaves brush AISo, I was going to save this one for a few weeks but, the only other thing I had to share was a flower brush … Apparently spring is over. 🙁

Anyhow, what I have for you is a vector scatter brush of fall leaves. Be sure to play with the size and colors accordingly (I usually work on a 30″ artboard). Have fun guys and as always, share this with your friends and colleagues and post me some of your beautiful artwork in the comments below! Download Here

Create your own vector rope brush in Adobe Illustrator

create your own rope brush
create your own rope brush
create your own rope brush

This brush makes handy “western” style text, borders and other things (it’s actually quite versatile). I always forget to save them and end up rebuilding them every time, so today upon a social media request I thought I’d do a short tutorial of the process that I use to create a rope brush

create your own rope brushI usually work with a pretty big canvas, and sometimes end up making it bigger depending on how well I’ve set up the brush. For this I’ve set my canvas to 30″ by 30″

 

 

 

 

create your own rope brush
create your own rope brush

Take your rectangle tool (M) make a rectangle, and then adjust two points so that it looks something like the image here.

Duplicate your rectangle by holding alt, clicking and dragging it so that it slightly overlaps itself. Then repeat that transformation by ctrl/cmd+D

 

 

 

create your own rope brushLine up your rope with the center horizontally button and a guide if needed, drag it into your brushes window and select “art brush.”

 

 

 

 

create your own rope brush
create your own rope brush

These settings can be a bit tricky, you can either stretch the rope or scale it proportionately (which will be large on longer strokes.) Depending on what you’re working on “Stretch to fit Stroke Length” works well.

Select your brush and grab your brush tool with (b), have fun creating 😉

Advertisement design by Graphic Designer Dallas Price for Monroe Cities 24th of July celebration. Published in The Richfield Reaper 07/16/2014.
Advertisement design by Graphic Designer Dallas Price for Monroe Cities 24th of July celebration. Published in The Richfield Reaper 07/16/2014.