The best approach is to firstly find out what other agencies and freelancers charge, which means carrying out a bit of a ‘mystery shopper’ exercise. Call various freelancers and agencies (or ask friends to help you if you feel the need to remain anonymous) and ask what their hourly rate is and then maybe ask for a typical price for a specific project. For example, a four page A4 brochure.
The key thing with any pricing structure is that you must be able to live on your income. So work backwards. Decide how much you need to make per month (after putting at least 30% of all income aside for tax) and then work out what your hourly rate for billable work must ideally be. Remembering of course that not all your hours in a week will be chargeable as you will need time for admin, marketing, attending meetings and so on.
Once you have all of this information you can then make sure that you pitch your pricing correctly, but remember to take into consideration the following:
Level of experience
A junior designer, or one that has just left university, is of course not going to be able to command the same rates as one that has been working for 30 years and has an impressive portfolio of blue chip client projects. It is really just a case of being sensible and knowing what you are worth. It’s also true that some clients will pay more than others. As soon as you start talking to a prospect, you’ll instantly get a feel for whether they are expecting the ceiling of the Sistine Chapel for a fiver, or have a marketing budget to throw around! Remember to be cautious if you include any prices on your website or in a brochure, as once the prices are set then you must abide by them, or you could get a bad reputation.
Charge more for higher value services
The next thing to consider is that you might not want to charge the same rate for all your services. For example, many agencies charge one hourly rate for creative/conceptual design, but a lower rate for artwork. As a guide, anything between £50 to £90 per hour seems to be around the right figure, maybe with design at around £80 and artwork at around £65, but these are of course just rough ideas based on our own information. Rates may also vary depending on where you are in the country. For example, a freelancer in London will undoubtedly charge more than one in rural Wiltshire.
Consider different rates for end clients vs agencies
Another thing to consider is whether you charge different rates depending on the type of client. For example, you may be able to charge a company’s marketing department £85 per hour as you are billing them directly, but an agency will need to mark up your rates and charge them on to the client, so they will expect a lower fee. The payback of this is of course that with an agency client you are not just getting one customer, you are in effect getting potential business from all of their customers with no marketing effort or ‘cost of sale’ to you once the relationship is established. So it’s only reasonable that you might need to charge a lower rate.
What about the dreaded ‘author’s corrections’?
This is a complete minefield and you need to be very clear in your Terms and Conditions what your policy is going to be. Most agencies and freelancers will also have what they call ‘reasonable’ edits which usually means a few adjustments here and there to get the design right, and then maybe a few tweaks at artwork stage. You just need to decide at what point you start charging for these.
In any quote state how may sets of author’s corrections are included, and what your hourly rate will be for future work. This covers you for situations which are bound to occur, for example when a leaflet is almost finished and then the client decides to rewrite the copy and asks you to ‘drop in’ totally new text, not realising that it is a two hour job to re-flow and re-format it!
Pitching for free
Some designers will do it no problem, but some feel that it’s just not fair. Sadly, because there are those out there that will, it’s hard for those who want to compete where the client is insistent that this is what they want. If you are happy to do it then this is fine, within reason of course, as you need to generate an income! However, if you do not, then all you can do is stick to your guns, remind them that they will be getting a professional and high quality service, show them other examples of work and, if needs be, walk away.
It is easy to agree a price verbally and then never get round to formalising it, but it’s essential that you do so as you need to avoid misunderstandings later. Be clear about the price you’re quoting and how many hours of work that actually allows for. Also make sure that your Terms and Conditions include details of whether you charge for meeting time, travelling time, expenses and so on. Just so there are no issues when you send in your invoice.
Re-selling other services
This is a key decision that you will need to make. If a client wants you to manage the print, or the photography as part of a project, will you buy that, mark it up and sell it on or will you ask the supplier to bill the client directly and just charge a project management fee? There are pros and cons to each as with the first option you make more money, but risk credit and cash-flow issues, and with the second option you make less money, but it minimises your risk and your admin requirement. Either can work so you just need to decide which is best for you.
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