How Much Should I Charge for Graphic Design Work?

One of the most critical aspects in almost everything we do in today’s corporate world is graphic design. When you build a website, it’s the design that would make page after page appealing enough for the visitors to decide to stay and see what else you have to offer. In marketing a brand, it’s also the design that creates the mood for the target audience and makes them realize how the products that a particular brand offers fit their personality perfectly. This is why it’s important to invest in graphic design. But the problem that graphic designers usually have is this: how much of an investment should a client put into my work?

Your Contribution

Before figuring out how much your rate should be, it’s important to realize just how important your work is. A lot of graphic designers have no idea how much to ask for because they fail to see the importance of their work. Knowing what value your product gives to your clients would also somehow help you quantify the value of the work you do.

Personal Identity

With every client you work with, you immediately become responsible for creating an identity for them. It’s not about you or who you are as a designer. It’s about what the client wants and what suits them the most. If you fail to give the client an identity that describes them perfectly, you also fail to give them the value that they paid for.

Brand Recognition

Your work is the main ingredient in allowing consumers to recognize a specific brand. You wouldn’t know it’s a Nike store unless you see that swoosh. You’ll recognize a McDonald’s from far away the moment you see those golden arches towering over one of their restaurants. You see anything red and white, and you automatically think of Coke. This is how huge design’s impact is on a brand. And this impact is what you create as a designer.

Your work as a designer is a form of communication. Through the design you build, your clients are able to communicate with their target audiences and relay their main message. Do they want to tell their customers that they’re a fun business to work with? Do they want to show that they mean business? Do they want a customer to feel safe with them? These messages can only be delivered to each customer if you come up with an effective design.

Let’s face it, any business that has an unappealing design would struggle to retrain their customers no matter how impressive their products or services are. It’s just hard to take a business seriously if they give you that impression that they don’t even know how to represent themselves effectively. This is what makes businesses lose clients, and of course, lose their chance of profit. Your work is something that would reel prospects in. It’s that neon sign that points any business out to customers and tells them that this is a better investment than the others.

These major contributions make you an integral part of your client’s setup. These are the things that you should remember in trying to come up with that perfect pricing scheme for the work that you do.

10 Important Questions to Ask Yourself

Before coming up with a final price, there are quite a few questions that you need to ask yourself first. These questions would allow you to come up with the most reasonable price possible for each service that you render.

1. What services are covered with the project?
   


2. What are my overhead expenses?
   


3. How much money do I want to make in the end?
   


4. What is everybody else charging?
   


5. How badly do they need my services?
   


6. Am I an expert in the nature of the project they’re asking me to do?
   


7. How extensive is my experience?
   


8. Will I charge hourly or will I charge a flat rate?
   


9. How much is the client’s budget?
   


10. What is my business strategy?
    

Once you have answered these questions, it would be a whole lot easier to figure out whether the price you are asking is reasonable and fair both to you and the client. Remember that you want to charge a reasonable rate while still staying competitive.

Tips in Coming Up with a Pricing Plan

Coming up with your rates is no easy feat. There will always be a number of factors to consider. If you focus on the right things however, it’s easier to get a clear perspective and figure out what the fairest price would be. Remember that in this line of work, there is always a risk of either charging too much, or charging too little.

Here are a few things that you should remember:

Make a profit

Don’t be afraid to give your client a price where you will actually make some profit. This advice is something that beginners should never forget. A lot of beginners think that it’s just about gaining experience for now. They give their clients such a low price because they feel that they do not have enough experience to demand for something that would actually give them a little extra.

Make sure the price you ask for does not just cover the costs. And definitely, you should never think about giving your clients a price where you lose out, either. Give them a price that would give you a reasonable profit to cover the effort, the sweat, and the mental energy that you drained as you worked on that project.

If you charge an hourly rate, make sure the client understands every aspect of the work

It always boils down to a question between charging a flat rate and charging an hourly rate. A lot of designers charge an hourly rate because this means that every minute that they are working is paid. However, clients are often wary of this system because they feel that they might be billed higher than necessary.

This is why it is extremely important to make sure that every client you work with has a clear picture painted in their mind the moment you tell them that you charge by the hour. Have a clear timeline of every step of the process. Show them the deadlines and potential problems that could cause a few delays. And whenever a problem comes up, be open to the client about it. This way, they know that every hour that they pay for really is worth it.

If you charge a flat rate, always set boundaries

A flat rate is always easier for clients to accept. However, you should also set a few boundaries when you charge a flat rate. You may be charging a low flat rate for a project so huge that you end up on the losing end. Make sure you define the services included with a specific project because the client might end up loading you up with a bunch of tasks, thinking that the rate they paid for includes everything on their mind.

Make your rates clear and specific. You could tell them that basic graphic design would cost them 0, but if they want you to handle the entire project, there would be an additional 0 for that. Have a list like this so that clients can easily choose the services they want and pay the flat rate for each service. You can even package a few services together and come up with a single rate for that to make it easier.

Know what you’re getting into

A lot of graphic artists actually charge extra should they encounter difficult clients. Remember that the more demanding a client is, the more tiring it would also be for you. It could literally drain all your creative juices, making work a little too hard for you. This could become a potential problem especially if you have another project lined up.

Before starting on any project, do some research first. Are these clients easy to get along with? How demanding are they? Look for other people they might have worked with in the past. This would allow you to have a clear picture of what you are getting yourself into the moment you sign that project agreement or contract.

Raise your rates when it’s time

You can’t stay at a single rate for the rest of your career. Especially when you work freelance, it’s always up to you to reward yourself with a raise every now and then. So how do you figure out when to give yourself a raise and start demanding more from your clients?

The moment you get swamped with work, this is the perfect time for you to raise your rates. Being offered project after project means that your services are in demand, something that you should take advantage of. It’s saying, “If you really want me to work on your project, you have to pay the price.”

Ask for a payment up front

Some ask for 50%, while some ask for 25%. This depends on your costs and if you have enough money to cover for them while the project is underway. This does not only ensure that you have a working fund to support the initial phases of the project, this also ensures that the clients stick around the moment the project starts. This has happened over and over again, with graphic designers working so hard on projects where the clients suddenly disappear. They end up losing a lot of time and money that was not even covered by the client.

You could also tell the clients that this deposit is non-refundable. This is an even better security measure for you, in case they suddenly decide to say that they’ve changed their mind and they want their money back.

Always start high at a negotiation

If it boils down to a critical negotiation, always start at a high amount. Think ahead and play different scenarios in your mind. Always think about the numbers that they would throw at you. “If I ask for this, how much would they want to take out of that amount?”

When you do your computation, you have to make sure that the point where you’ll be coming up with the compromise is the point where you want to be in the end. You can’t ask for 00 if that’s the rate that you really want. You start at 00, which they could lower down to 00. Who knows, you could even ask for 00 after that and end up with 0 more of what you initially set out to get.

Be flexible

Just because you already have a set price list does not mean that you cannot negotiate any longer. You also have to be flexible, otherwise, clients could turn away and get somebody else no matter how badly they want you to be on their team.

You could throw in an extra service in case they opted for a really high package and are asking for a discount, or you could convince them to get a few extra services with the promise of 10% discount.

Be competitive

What does everybody else charge for their services? Always base your price on this. No matter how great you think you are, your potential clients will always have a few other options up their sleeves. This means that the moment they decide that you’re just not worth it, it will be easy for them to invest that budget onto someone else.

If you do end up charging them a little higher than what everyone else is asking for, always be ready to justify this. You may have more experience over the competition, or the tools that you use may be more advanced than what they have. You may also be able to deliver the results they need within a smaller timeframe.

Don’t be afraid to lose clients

Some graphic designers end up saying yes to an unreasonable offer just because they want the client to stick with them. If you believe that it’s a budget that you cannot work with, don’t be afraid to say no. Remember that for you to be able to deliver top results, you also need the necessary resources to make it work.

If a client is trying to pull your price down to an unreasonable amount, just say no and walk away. If that’s how badly they need your services, then they would understand that they also have to pay the right price for it.

Sample Formulas for Pricing

Here are three basic formulas that you can adopt in case you are still confused about how to come up with a pricing package.

Expenses + Salary

Just figure out how much your total costs are. Look at what you are hoping to earn by the end of the year and divide it with the number of working hours. This should give you a total per hour rate that you can base your salary from.

(Rate Per Hour x Hours to Complete) x Complexity Level

This should give you a pretty good idea on how to price package rates. Create a table on the complexity levels and how much the difference would be as the project become more challenging.

Quote from Contractor x 1.10

This is a pricing usually used for outsourced work. Of course, the multiplier that you want to use would still depend on the resources, tools, and other things that you would need. The bigger the project, the bigger your multiplier could also be.

Know Thyself

Remember that when it comes to pricing, there is no exact formula that’s right for everyone. The price you ask for would still depend on the circumstances. Do you still have a few other clients lined up? Is this a project that you want to work on so badly? Would working on this project take up all of your time that you wouldn’t have time to work on other projects for quite a long period?

Make sure that you know who you are as a graphic designer and how great your work actually is. From here, always put that value into every price that you ask for. Remember that each cent that the client pays you defines how much you are worth as a professional. Make sure the price really represents you, and does not cheapen your work, nor does it exaggerate what you can really accomplish as an artist.

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How Much Should I Charge for Graphic Design Work?

Charge Your Worth: The Complete Guide to Getting Paid

Energy, inspiration, emotion, talent, experience. Creating powerful design concepts takes everything we’ve got. You would think that clients would run to reward such a rare combination of hard work, momentary enlightenment and painfully acquired know-how. You would think. Instead, this is how it usually goes:

1. Client calls creative with urgent need
   


2. Creative invests it all in satisfying said need
   


3. Client has no urgency to pay
   

Many of us are being treated as firefighters. We must come through with consistently impressive design concepts in exchange for completely uncertain pay. When clients approach us to solve their most pressing creative problems things run amazingly smoothly. They are eager to commit, negotiate a rate, agree on deadlines (now those are important to them), and get started ASAP (which is yesterday, of course). Once the fire goes away, however, everything seems to run more slowly. So, how exactly do we speed up the payment process, show our true value, and ensure that our creativity doesn’t starve?

Collecting payment will never be easy, but with the right tactics it can become bearable and even fulfilling. Here’s what you do to increase your chances of getting paid fairly and on time:

Print out a poster version of these tips.

1. Prove your value in economic terms.

Will your work boost brand recognition? What does that do for sales and revenue? How does that impact market share (broadly)? Arm yourself with research that proves the business value of design, and make sure that you communicate it to your client succinctly. Your business proposal is an ideal place to include these facts.

2. Show that you’ve been paid before.

Social proof can decrease the amount of risk that clients feel when they are about to pay for your services. Hey, if others have bet on your talent in the past, why would they miss out on it? In showing that your clients consistently pay for work, and do so on time, you will give a clear picture of what your expectations look like. I saw clients delay my agency’s payment while being completely on time with other types of suppliers, and had always wondered what they were doing right (or what we were doing wrong). Here’s what that was: other suppliers established that on-time payment was the minimum standard to carry on any type of relationship with them, and that this rule applied to absolutely everyone.

3. Offer more than one payment method.

Cash is not necessarily king when clients need convenience. Explore online payment tools that allow you to expand your clients’ payment options. Stripe offers credit and debit card payments, while Paypal allows for additional methods like real-time and delayed bank transfers. For in-office payments try Square.

4. Provide several payment schedules.

Don’t wait until they ask or default. Structure a tiered payment policy where those who pay first pay less (Early Payment Discount). Also show how a late payment can make them incur in unwanted penalties. While some designers cringe at the sound of “late fee”, including it up front does insulate you (and your team) from a budget-crushing delay. There’s no reason for a late fee to feel like a threat. It is the very least you can do to pass on the message that your waiting time is worth some real money (versus, you know, hot air). And don’t be fooled: a dollar today is worth much more than a dollar tomorrow. For every minute that your hard-earned cash spends in someone else’s wallet, there are several profitable investments that you could be engaging in instead.

5. Work with a teammate.

Listening to several voices asking for the same thing can increase the sense of shame for nonpayment. Ask someone from your team, or hire a third party, to contact the client on behalf of your company. While risky, hiring out a freelancer to make these types of calls might be a low-cost alternative. To hire a professional collections agency, check out point 15.

6. Send out automated email or SMS reminders.

As much as I struggled with this idea, not all clients are purposely trying to skip your payment. Sometimes memory fails and there are no systems in place for reminding themselves of upcoming dues. In this case, make sure that you do prepare to warn them about dates and fees. While a personalized email or call might seem the best way to go about it, these take valuable time away from the actual work that you are supposed to be doing for the client. After all, he/she hired you because of your design talent, not your ability to collect payment over the phone. Setup automated reminders with software packages like Quickbooks, Zoho Invoice, Xero or Freshbooks.

7. Tie key deliverables to payment.

Though this is a double-sided sword (i.e. you will miss payment whenever you miss a deadline), it’s a good business practice and will generally benefit the creator. Sometimes we ask for an advance upfront and a final payment after we’ve delivered everything the client has required. A smarter way to approach this is to condition key deliverables to paying different (smaller) percentages of the total bill. A key deliverable is something that is highly valuable in the eyes of the client: a finalized site launch, logo concept, or business card design are all good examples. If the client really wants to get a hold of his/her company’s new logo, attach a specific percentage of the total bill to that delivery. 30% upfront, 30% upon logo delivery and 40% at the end of all remaining work is an example of such types of agreements.

8. Deliver on time.

In the end, every design project is a transaction. You exchange currency (i.e. amazing work) for dollars. Make sure that you are holding up your end of that deal, and clients will feel the need to be reciprocal. To reinforce the idea that you are complying to what was signed, use wording like “as promised” or “as we agreed” in emails & other types of communications. These subtle pointers signal commitment, trust and reliability. Now, if we’re being super reliable, how could anyone want to disappoint us? (They don’t want to, but end up doing it anyway. Read on for more tactics).

9. Have them sign up to a payment plan with specific installments.

Some contracts include a specific space for signatures on the project payment plan. The advantage of having clients agree to this specific plan in advance is that they are committing to honoring your fees properly at the time when they need your services the most. With time, their initial urgency fades and can result in the firefighter effect that I discussed before. Hi! Excited to work with me? So am I. Now let’s agree on a payment promise while we’re both happy

10. Be genuinely nice.

When I first founded an agency in 2008, we gave out seasonal corporate gifts that reminded clients of how important our relationship was to us. I soon realized that we were not alone. This Corporate Gifting Survey, conducted by the Advertising Specialty Institute, concludes that businesses spend approximately on a single client’s gift. Top goals include showing appreciation, developing relationships and generating goodwill. Think about it: if corporate gifts weren’t effective business tools they wouldn’t be a billion market (in the US only). And reciprocity, my friends, can be a powerful thing.

11. Try recurring billing.

Is your client paying for a product or service on a monthly basis? Perhaps you have set up a continuous design service package, or you sell web design as a service (yes, this is a thing). In this case, you can set up a monthly billing plan with platforms like Paypal or Stripe. Your client’s card will automatically be charged each month, removing the stress associated with collecting your fees.

12. Establish authority in your communications pieces.

Think about how you can position yourself (or your team) as an expert in brand stationery, websites, proposals, contracts and other pieces. Do you belong to a professional organization? Has your business been certified by a partner? Has the agency won any awards? These are things that your client needs to know. In an environment of respect and admiration, it becomes harder to elude responsibilities.

13. Find and use robust timesheet/invoicing software.

Oh, let’s face it. Sometimes we’re not getting paid because we forgot to send that invoice. Whatever comes next is on us. To avoid delays that arise from our end of things, make sure to try an agile invoicing platform. If your fees are based on an hourly rate, there are amazing tools that will also help you keep track of the amount of work invested and calculate your bill automatically. For painless time tracking and invoicing, try Harvest, Ballpark, Ding, Toggl, Timely or Everhour.

14. Use factoring.

Factoring is a simple procedure where your outstanding invoices become cash in exchange for a specific fee. There are many banks and financial companies that will literally buy your accounts receivable (everything your clients still owe you) and turn it into cash. Their commission can go anywhere from 15 to 30% of your invoices, but conditions may vary depending on your annual revenue and other factors. For freelancer-friendly invoice advance options, try Fundbox and Bluevine.

15. Everything else failed? Outsource collections.

OK, we’ve reached that point. This negligent jerk simply won’t pay and nobody’s got time for that anymore. Outsource the struggle. For effective debt recovery services, try TrueAccord or InvoiceCare.

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Is there anything worse than begging for something that’s yours? As creators, we invest our very best to solve our client’s problems, and should expect a minimum level of appreciation from them. This appreciation comes in various forms, but only one can literally feed us: payment. At the very least, we should expect them to hold up to their end of the deal and pay the right fees on the right dates. Try these tactics and let us know if they work out for you. (Oh, and feel free to print out a poster version of these tips!)

Know any other secrets to get paid on time? By all means share!

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Charge Your Worth: The Complete Guide to Getting Paid