Pricing Guide for Freelance Graphic Designers
Starting a freelance graphic design business can often lead you to one significant hurdle: pricing your services.
Pricing can be very tricky because it comes with a lot of existing negative feelings making it difficult to talk openly about. I come from a white, middle-class family (aka lots of privilege), and growing up my family always talked openly about money.
Personally, I enjoy talking about money but I also understand that not everyone feels that way. I believe the more we talk about money and are transparent about how much we make in our design businesses the more it benefits the design community as a whole.
So let's talk transparently about how to price your services as a freelance designer.
Understanding Where to Start
1. Know Your Phase
Your approach to pricing should evolve as you advance through the different stages of your freelance graphic design career. Whether you're a Newbie absorbing as much experience as possible, a Freelancer refining your niche and automating tasks, or a Creative Expert recognized for your unique solutions, your pricing strategy should reflect your expertise, reputation, and the value you deliver.
2. Define Your Baseline Income
Before anything, calculate the baseline income needed to sustain your business and personal life. This involves summing up your desired monthly take-home pay and monthly expenses, including everything from software subscriptions to office rent. This total gives you the necessary monthly revenue to target.
Hourly vs. Flat Rate Pricing
1. Hourly Pricing
To set an hourly rate, consider the maximum number of billable hours you can realistically achieve each month. Remember, not all your working hours can be billed to clients—administrative tasks, client acquisition efforts, and other non-billable activities also occupy your time. Divide your needed monthly revenue by your billable hours to find your rate. For example, if you aim for $10,000 monthly revenue and can bill 80 hours a month, your rate would be $125 per hour.
2. Flat Rate Pricing
This method suits repetitive projects with a similar scope, enabling you to streamline processes and manage workload efficiently. Determine the number of projects you can handle per month and divide your needed monthly revenue by this number to get your flat rate. This approach aligns well with Value-Based Pricing, where you charge based on the project's worth to the client rather than just the time spent.
Implementing Value-Based Pricing
Value-Based Pricing represents a paradigm shift, moving away from mere time expenditure towards the value delivered. Especially relevant for those in the Creative Expert phase, this model charges based on the significant impact your work has on a client's business. It encourages designers to understand their work's intrinsic value deeply and communicate it effectively to clients.
Before giving any price to the client you need to have a face-to-face meeting or video call. The client usually comes into the discovery session with an idea of how much they’re willing to spend on the project and it’s your duty to figure the amount by having an open conversation with the client.
Here are some questions you can ask the client in order to understand the client’s problem and get an idea of how much the solution will cost:
Can you tell me about your business and what you need for this project?
Can you tell me more about the service/product you’re offering?
What’s the price point for this service/product?
What is your goal for this project?
Why will [YOUR SERVICE] help you achieve your goal?
Why are you ready to invest in your goal now?
How will we measure the success of this goal?
(This is what you’ll base the price off)
By asking a lot of questions, two things will begin to happen. First, the client will start to see you as the creative expert and understand the value that you’re bringing to the table. Second, you can diagnose the client's problem so that you can provide them with a solution (value!).
Focus on solutions, not deliverables
Rather than focusing on the scope or list deliverables for a project you need to become a problem solver. Because every client's problem is unique, begin with understanding the client's problem. Determining the client's pain points and goals gives you an understanding of what they're hoping to achieve and allows you to diagnose the problem rather than the client self-diagnosing and telling you what they need.
Here are some examples of common problems a client might self-diagnose and solutions you can offer.
Problem: “I need a logo”
Solution: They’re in need of a brand identity that will elevate their online presence so they can begin to build trust and brand recognition.
Problem: “I need a place where clients can book my services online”
Solution: They need a website that is on brand and user friendly so that they can attract more clients to their business and allow customers to book services online.
Problem: “I need to sell my product online”.
Solution: They need an e-commerce website that is user-friendly so that they can convert visitors to customers.
How do you come up with a number?
After diagnosing their problem and understanding the goal they hope to achieve you can begin to explore the price for the project. Every client is going to have a unique problem therefore the value of the solution will be different also.
Depending on the measure of success for the client’s problem (see question 7 above) the end goal will be tangible or intangible. Intangible goals might be a brand identity that brings the client brand awareness, this is harder to measure. A tangible goal might be a sales page that allows the client to launch a course that makes them $60k.
After using Value-Based Pricing for two years I aim for between 5-10% of the clients’ measurable goal. Let’s say you’re creating a sales page for a coach and their goal is $60k during the launch. Investing $3k (5%) in order to reach that goal seems reasonable, right?
Maybe that’s too low, what about $6k (10%)?
Part of using Value-Based Pricing with your graphic design clients is finding the price that is right for their business and goal which is while the price will change for each client.
Want to learn more about Value-Based Pricing for graphic designers? Check out the resources below:
Chris Do
How To Charge For Design—Value Based Pricing
Morgan Rapp
http://dbm.morganrapp.com/freebie
Discussing money can feel taboo, but achieving transparency within the freelance graphic design community could demystify financial expectations and foster fairness and equality. By openly sharing rates and financial experiences as comfortably as possible, we encourage a culture of learning and support that uplifts the entire professional community!
GET THE TEMPLATE
PROJECT PROPOSAL TEMPLATE - $75
First impressions matter. Use this 7 page project proposal to inform your clients of the project scope, the timeline, price and what's expected.
