How much should I charge for this? It’s a question I lamented over when I first started freelancing. The question of pricing is probably one of the most difficult when it comes to starting one’s own design business. There are so many ways to go about it. Two of the most common methods are billing by project or hourly. One formula for charging by the project, published by designer David Airey is:
level of expertise + project specifications + turnaround time + service & support + level of demand + current economy + physical location = TOTAL COST
My mentor, Todd Temple of T2 Design, used three factors to determine his pricing when he started negotiating a project.
Quality vs. Cost vs. Turnaround
A client could choose one to be the priority. For example, a client could have a high quality project, but costs would be higher and turnaround time would be longer. Or, the client could have a low cost project, but the quality would also be lower.
Yet another option is to charge and hourly rate. The Graphic Artists Guild Handbook provides a nice formula for this calculation.
- Add up your annual rent, utilities, insurance, employees’ salaries & benefits, advertising & promotion, outside professional services, equipment, transportation, office & art supplies, business taxes, and other expenses + a reasonable salary = TOTAL
- Divide the TOTAL by 900 (because you will work an estimated 900-1300 hours in a year).
- Add a 10-15% profit margin.
- The result is your hourly rate.