How to Price your Graphic Design Work!

Who is Michael Janda then?

Michael Janda is a veteran graphic designer. He is an award-winning creative director, designer and author. He has worked with some big names such as Disney, Google and National Geographic. His first book, ‘Burn Your Portolio: Stuff They Don’t Teach You In Design School But Should’, is another great read but I’ll save that for another week.

What is this book about?

The book explains how to price as a graphic designer for both freelancers and agencies. A lot of the time, graphic designers merely guess how much they should charge for their work. By plucking a number out the sky to charge a client, it often leads to being overly stressed and underpaid. But what if there was a way to take luck out the equation?

Michael Janda teaches you to do just that. HOW? With the 3 variables of the pricing spectrum:

1) calculating the cost to produce your work

2) Understand market costs

3) Unearth your clients budget

This book is invaluable.

The 3 biggest take aways.

1) Production Cost.

‘You cannot consistently price projects profitably if you don’t know your cost to produce the work.’

I REPEAT.

‘You cannot consistently price projects profitably if you don’t know your cost to produce the work.’

So, how do you figure out production cost. Michael Janda has an ingenious equation for you to use:

Hourly Burn Rate X Production Hours (estimated) + Hard Costs = Production costs.

Hourly burn rate is what it costs you to be in business. ‘How much you figuratively burn money to be in business.’

(HBR X PH) + HC = PC

READ THIS BIT.

How do you calculate you hourly burn rate? The easiest way is to look at the annual salary you feel you are worth and divide by 2,080. 2080 is 40 hours per week for 52 weeks.

So, I feel my annual worth is a £20,000. If you have little experience, perhaps £10 an hour is a good starting point.

£20,000/ 2080 = £9.61 an hour

This means if someone wants me to do a branding project that I think will take 40 hours, I shouldn’t charge less than:

9.61 X 40 + 2080 = £404. 61.

There are plenty of other factors and scenarios that Michael Janda goes in to for this but if you’re a freelancer, doing this calculation is a really helpful one to start with.

2)  Market Value

‘The market value of a product or service is equal to the amount that someone is willing to pay for it. No more. No less.’

Michael Janda illustrates this by explaining that a £2000 logo for one customer may seem extremely high but for another, it is a steal.

So, how do you judge the market value? You calculate the return on investment that the client receives from the work you do.

If you create a marketing campaign for your client and they increase their annual revenue by £50,000, then your work is considerably valuable. As you now have a proven track record for success, you can then tell future clients that on a similar project, you provided work that yielded a huge return on investment. This means you are backing up why your work is of value.

If you’re like me though, you may not have pulled off a marketing campaign that is so impressive. Another way of establishing market value is based on competition. Ask around. See what other designers are charging for the same work. Or Survey clients. So obvious that you might not have done it. Ask what they would be willing to pay. Ask people you aspire to work with how much they would be willing to pay and go from there.

3) Clients’ budget.

Michael Janda explains that ‘nine times out of ten, if the client’s budget is set, it is set.’

This means it doesn’t matter what salesman tactics you have, you won’t be able to change it. However, it is critical to know the budget number before choosing your price.

So how do you do this?

Firstly, ask a lot of questions and take notes. Have a clear idea of the scope of the project.

Then, say something like ‘Ok, I think I have a clear idea about the scope of the project, and what you want to accomplish. Is there a budget range you are shooting to work within?’

1 of two responses.

‘Well I’m talking to a lot of designers and then we’ll decide the budget.’

OR

‘We’re trying to be below x.’

Now, you must put on a poker face. https://www.youtube.com/watch?v=JpvW1T7hXjo

Why? Because you don’t want to let your client know whether that is too high or too low.

If you’re like ‘YES. Get in. Yes. I am going to be minted.’ The client would probably be alarmed. They’re going to doubt your ability to do the job, and probably not offer you the work.

You review the price after the meeting and then send a rough estimate.

If the client does not divulge the budget, you can float a price range by saying similar projects we have done in the past have cost between £500 – £750. PAUSE. Does that fit within your expectations?

You can quickly tell from their body language whether you have exceeded their comfort level.

Who should buy this book then?

I would recommend this book to any graphic designer that is struggling with pricing, as an individual or as an agency.

Anyone who is at the start of their career, this book would be incredibly helpful.

It is a game changing in fact.

Hope this article was helpful! Please do leave a comment if it was.

Posted in: Uncategorized

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s