If you asked three different designers what they charge for a logo, you would likely get three very different answers. So which one's right? How do YOU know what you should charge?
If you Google this topic of "what to charge," you'll get many answers. A very common one is that you should research what's competitive in your field and your physical area. To look at what other designers are charging and be in line with them based on the experience you have. Though this might be good advice when you're first starting your business, I disagree with this advice in the long-run. Why? Because we are all unique in how we approach a design problem. We all have and gain, over time, new strengths, skills, and experiences that contribute to who we are now and how we create even better quality work. By "competing" on price, we encourage clients to see us as a commodity that can be compared apples-to-apples with other designers. And you're simply not an apple.
I want to encourage you to think differently about this topic of "what to charge." Don't be inclined to compete on price. As the saying goes, when you compete on price, it's a race to the bottom. Meaning, there will ALWAYS be someone willing to do work for less. There are other ways to demonstrate your value, and they have less to do with the actual price.
The number one thing to remember is that you need to position yourself as an investment for your client, not an expense.
Your client should be able to see how spending money with you will get THEM something greater in return. So, always think about what's in it from your client's perspective. By working with you, how will it positively affect their business? How will they get a return on their investment (known as ROI)?
If you've been part of my community for a while you know I talk a lot about how the value of what we do is all about perception. If the client believes they are getting tremendous value by working with you, then it's the right price. It's really as simple as that. The not always simple part is that it's up to you to communicate how their investment in your services will meet or exceed their expectations, so they quickly see that return on their investment.
Position yourself as an investment, not an expense - when you do this well, the price becomes much less important because the client can envision the benefits they will get from working with you. In simple terms: they'll sell more things, they'll bring in more revenue, their business grows. When you can position yourself this way, the money they spend working with you is quite obviously an investment. They get a return on what they spend with you.
You are a business owner. Whether you call yourself a freelancer, side-hustler, studio or agency, it doesn't matter. You need to take your business growth seriously. Otherwise, you have a hobby. Just as your clients are probably doing everything they can to grow their business, you should be too.
If your business isn't making money, then what are you doing? And when I say it's making you money, I mean that the money you bring in covers your operations costs, your wage, taxes, retirement, health care, AND your PROFIT. Profit allows you to invest back into your business for things like better equipment or learning new skills so you can help your clients even more. Now, I know it will take some time to get to this point of attracting enough steady work to support everything I just listed fully, BUT, it's so so important to get clear NOW on your revenue goals so you can take steps toward your goals based on real, meaningful numbers. Again, don't let your business happen TO you. Take charge of what you charge.
Maybe you're hesitant to charge what you actually need. I want to help you think about it differently.
If you tend to downplay what you do or call it a side-hustle or tell yourself you're just "freelancing," this can be an excuse in your mind to be lax on what you charge. You might think that as long as you don't take this business thing too seriously, you can accept whatever a client offers as payment and justify it in your mind as being "good enough." And there's no judgment here at all. I say this with love because I used to operate this way, and I think many of us do, especially when we're just starting and figuring things out. But I want a better and faster path to profit for you.
Once I got serious about knowing my numbers—what I actually needed, revenue-wise, to make a living and be profitable, this all changed. It became objective, more about the facts, weighing pricing against my goals, rather than randomly taking on projects for any amount of money just because they were offered to me.
So, how do you know what you should charge?
First, you need to know your numbers—what do you need to take on a project (on average) to make it worth your time?
Next, let's get into the nitty-gritty of estimating what a project takes to complete.
Whether you estimate price by the number of hours or by the project, you must think through all of the necessary steps in your process, the expenses, client stakeholders, and even potential complications involved in your project. You need an accurate idea of the scope to come up with a precise price.
An accurate estimate allows you the space you need to do your best work and ensure your business is profitable.
Even if you think a business card design will take you three hours to design, your price should not be based on only three hours. Ask yourself what else goes into this project:
- What about revisions?
- Meetings and emails?
- Researching printing options and requesting quotes?
- Preparing the final files for printing?
- Answering any questions the client may have?
- Will you need to purchase a particular typeface for the project?
- How many people are making decisions on the client's team? There may be extra time involved to manage the project efficiently.
- What other potential complications might come up? Maybe the client didn't tell you that they need cards for five employees, not just one. How will you handle that?
This is a simplistic example, but I think you can see that when you start to add up all of these things and assign a dollar amount to each, your estimate will be much higher than the equivalent of three hours.
So, back to our three designers, all charging different amounts for a logo, which one is right? As you may have guessed, they could all be right. Or they could all be wrong. Each one SHOULD be charging based on what their business truly needs to be profitable AND the perceived value the client receives by working with them.
Each designer has their own approach to designing a logo—a process that works for them to get to the best solution. For an experienced designer, that process may take years to develop and perfect. It gets better with every logo design project they execute. A big part of the value the designer offers is taking a client through that process, which often involves strategy and in-depth research into the client's ideal customer and their business goals. This particular designer will likely charge a lot more for a logo design than a less-experienced designer who hasn't yet developed a great process. And I don't say this to put anyone down. It's a natural progression every designer goes through as they gain more experience.
So, what is your process for demonstrating the value of your work AS AN INVESTMENT for the client?
If you're new in your business, how are you actively working on perfecting your process?
To be clear, knowing these answers doesn't mean we'll always get our ideal price, but that's okay. Just knowing WHAT we need and actively working toward it with every estimate we create, is the critical part.
In my upcoming course, Behind Design, I go deeper into how to set your hourly rate and how to estimate projects for profit accurately. So, there is more help available in this area if you need it. Reach out if you have any questions or if you want more information on the course.
I hope this was helpful to you. As always, I love to hear from you. Leave me a comment, share this video if you found it useful, and remember: The world needs great design - your great design, so get out there and share it!
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