Most designers don’t get paid what they’re worth. The reason they don’t is that they rationalize the value of the service they provide. What I mean by this is they try to justify why they are charging the price they do for their designs by itemizing what’s involved in their creation process.
A logo will cost this amount of dollars because it will take me X hours of research, and another Y hours of development and finalization. Since my hourly rate is Z, the cost of the logo is (X+Y) x Z
Cost of design = hours invested X hourly rate.
This formula works for many designers and they're happy with running their business this way. But the problem with this scenario is you're trading time for money. Yes, it’s a tried and true method used across many industries. But it shouldn’t be used for design. Or at least it shouldn’t be the sole method of calculating what you charge your clients.
How much you earn running your graphic design business should not be related to how many hours you put in. It should be connected to the value you provide.
Face it; we live in a world where we assign a dollar amount to most services. A haircut costs this much. A cab ride downtown costs this much. Having your car serviced costs this much. But even simple things such as these have variations based on value.
My daughter changed her hair colour recently. It’s not the first time she’s changed the colour, but this time she decided to go to a different salon. One that charges almost double what her usual salon does. Why? Because the man running the new salon has a reputation for excellence and the perceived value of the service he provides is worth that much more to those who go there.
In the end, my daughter paid a much higher price for her new hair colour than she used to. She loves her new look and is getting compliments left and right so in her mind it was well worth it. It's a perceived value.
The same scenario applies to cars. When you have a problem with your vehicle you can take it to a privately owned garage, maybe a national chain such as a Walmart garage or you can have it serviced at the dealership.
From my experience, the dealership is always more expensive. But think of it from a value perspective. If you drive a Honda, who is more equipped and more knowledgeable about your car than the Honda dealership? That perceived value is why some people are willing to pay more to have their car serviced by the dealer.
The services you provide as a web designer or graphic designer are not commodities like haircuts or oil changes. There is no one price fits all. Or at least there shouldn’t be.
A logo for a local bricklayer should not cost the same as one for a regional airline because they bring different values to each client. The representation the logo brings to each client affects them each differently.
You may design a great logo for the bricklayer but what’s he going to do with it? Stick it on the side of his truck and his business cards. That may be it. Most of his work will come via word of mouth referrals and through contractors. What his logo looks like may not have that much impact on his business.
The airline, on the other hand, is going to showcase their logo on everything to bring awareness to their business. It will be on their planes, their building, their uniforms, their tickets, even on the cups and napkins they serve on their planes. And that’s not counting the vast marketing campaign they will use it on. Their logo will be displayed everywhere, and over time the logo you designed will come to represent an excellent, reliable airline, that offers quality flights with courteous, friendly staff. For that reason alone the airline’s logo should cost way more than the bricklayer’s logo.
It doesn’t matter that both logos took you the same amount of time to design. Their value is different. And yet many designers would still charge for both logos solely on the time they spent designing them.
When you start trying to rationalize what it is you do by focusing on things like time and effort, you lower the value of the service you provide. This rationalization devalues what design is all about.
Designing is all about vision. It’s about emotional impact. Giving a visual voice to what the design represents. It’s about problem-solving.
Both the bricklayer and airline needed a logo, but the problem that logo is solving for each company is vastly different.
Instead of rationalizing your pricing to your clients by explaining every little thing you are charging for, or how much time a project will take, you need to explain to your clients how they will benefit from your designs. How design is an investment and not just an expense. When done right and with proper focus, a well-implemented design can skyrocket a company’s growth. When explained this way, a client will begin to see the value you bring.
Will there be a backlash if you do this? Of course, there will be.
Some clients will counter with “You're crazy. I could have someone on Fiverr design my logo for a fraction of your price.”
Yes, they absolutely could. And what would they get back in return? Maybe a hastily-designed image. Something that uses stock imagery and may or may not be similar to many other logos out there. There is one thing to be sure; it will fulfil their rationalized expectations of getting a logo for as cheap as possible.
What they won't get from places like Fiverr is the conviction a well thought out design generates. A design that represents their company’s voice, the tone they want to present to the world. Something that will truly represent them and everything their company does. they will be missing that value.
As a professional designer, and that's what you are, it's your job to explain to your clients how that extra value goes beyond how much time it takes to design something. It's that overall value that you should be charging to your clients. The logo itself is only part of the overall picture it represents.
Show your clients the value you provide them. Show them how you are focusing on the desired outcome they want to achieve with the design and not just on the design itself. When you can successfully convey that message to your clients, they will stop questioning your prices. They’ll know that whatever they pay you is an investment they are making in their business and not simply a purchase.
If you want to grow your design business, you need to stop exchanging your time for money. Stop rationalizing value.
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This week’s question comes from Adam
I've recently quoted for a Web Design & Development job. After the project is finished, I've quoted a monthly fee that covers ongoing content updates and design consultation, plus domain, web hosting, and 7 custom email addresses.
The client is stating my price is a bit too high and is wondering how I "calculated" my price. I don't necessarily "calculate" my price numerically, but rather set it based on value to the client and what I believe my services are worth.
The client's mentioned that July-Dec is typically quite slow for content updates, and so, would like to see a reduced price for the 2nd half of the year.
What do you think? Any suggestions are appreciated.
To find out what I told Adam you’ll have to listen to the podcast.
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Running a graphic design or web design business all by yourself isn't easy. If there are any struggles you face running your design business, please reach out to me. I'll do my best to help you by addressing your issues in a future blog post or podcast episode here at Resourceful Designer. You can reach me at feedback@resourcefuldesigner.com
To run a home-based freelance design business you need to know what to do for it to succeed. You also need to know what to avoid doing so as not to fail.
You’ve done it. You’re running your own design business. It’s a fantastic feeling, isn't it? The freedom and the power it brings you. The counterweight is the responsibility and pressures you face because everything is now on your shoulders. When done right, running your own business can be the most satisfying occupation there is. Just ask any successful entrepreneur. But if things go wrong, you have nobody to blame but yourself.
When it comes to starting a home-based freelance design business, most people research how to go about starting one. They read up on the things they need to get. They make lists upon lists of what they need to do to give themselves the best chance of success. That’s how you should do it.
However, what often happens along the way is you pick up bad habits that can affect you and your business negatively.
Here are 10 things you need to avoid while running your freelance design business.
One of the most significant obstacles to overcome when running your own design business is the illusion of the freedom it brings.
Don’t get me wrong. Setting your hours and taking time off whenever you want without having to ask for permission is a definite perk when it comes to freelancing.
However, I said the illusion of freedom for a reason. Freelancing doesn’t mean fewer hours and less stress. It’s the opposite in fact. You are running a business on top of designing for your clients. That doubles your responsibilities. This holds especially true for new businesses. You may find your social life suffering as you devote countless hours to get things off the ground.
Avoid slacking off.
Maybe running your own home-based design business was always your dream. Perhaps you ended up here unexpectedly through lack of employment. Regardless of why you are doing it, you need to have goals if you want to succeed.
What do you want to accomplish with your business? Do you want to conquer a particular niche? Do you want to become known for a specific skill?
It’s nice to have design work that pays the bills, but if you don’t have goals and you don’t push yourself towards those goals, you will not improve as a designer.
As a design professional, you should have a mindset that design can change the world. Set goals to grow your business and to grow as a designer and don’t get left behind.
Avoid a lack of direction.
As a freelance designer, you spend a lot of time by yourself, sitting in front of your computer designing amazing things for your clients. But how do you expect to improve as a designer if you’re not communicating with other designers? There’s only so much you can learn from articles, videos and yes, even podcasts. You need people you can bounce ideas off of and get real criticism from. People who are not afraid to tell you when you’re going in the wrong direction.
Clients don't count. Sure clients give you valuable feedback on what you’re doing. But they will never be able to view your work with the critical eye you need to improve your skills as a designer and business person.
I’m talking about your peers. Other designers. People who not only understand what it is you do but how you do it. People in the same trenches as you. One of the biggest mistakes Freelancers make is not keeping in touch with other designers.
Find people to discuss design ideas with, to get critiques from, to solicit business advice. The more designers you are in contact with the more you'll grow.
Avoid isolating yourself from other designers.
One of the problems of running a home-based design business is that many people don't see it as a real business. They imagine you as an unemployed designer who sits at home binge-watching Netflix and occasionally designing something whenever someone calls upon you. To them, it’s like designing has become your hobby and you’re lucky enough that some people pay you for it.
Because of this perception, friends, family and acquaintances may ask you to design for them as a favour. If they do offer to pay you, it's rarely what you merit. After all, you're not doing anything, and it shouldn’t take you long. Plus, they’ll help you out by spreading the word of what a great designer you are. Maybe they're hoping this exposure will lead to employment for you. Don’t fall for it.
Sure it’s OK to design your sister’s baby announcement cards as a gift. But if your brother, your uncle joe or your old college roommate asks you to design a logo for a new business, they need to pay you. Give them a discount if you want, but let them know you’re not at their beckon call. You are running a business, and they will treat them as clients.
Not sure where to draw the line? Look at it this way. If they are asking you to design something that could directly or indirectly bring in money for them, and this includes charities raising funds, then they should pay you for your services.
Avoid being exploited.
Another issue when starting your own design business is not knowing how much to charge. In most cases, designers undersell themselves and it ends up hurting them and the industry as a whole.
Even if you are a new designer fresh out of school, your skills and knowledge are still valuable. Seek the compensation you deserve. Find out what other designers and design studios in your area are charging and try to fit in line with them.
Remember, it takes a lot less effort to land one $60 per hour client than it does to land four $15 per hour clients.
Avoid being underpaid.
It’s human nature to want to please others. When a new client comes along or an existing client has a new project for you. You welcome them with open arms.
This gimme, gimme, gimme attitude is great when you are just starting out and can use all the work you can get. But as you grow and take on more clients and more work you will realise that not every client or design project is a good fit for you.
You need to be comfortable turning down work. It may sound like a foreign concept to you, but you need to determine if the project offered is right for you or not. If it isn’t then it’s OK for you to turn the job down.
Avoid taking on every project.
As a home-based designer working by yourself things can get stressful when jobs start to pile up. Instincts will tell you to pump out as much as you can to lighten the load. But in doing so, you are compromising your creativity.
Design concepts take time to germinate. The more time you take thinking about them, the more variations will come and go from your mind helping you narrow down your focus and creating the perfect solution to the problem.
To allow yourself the time needed to do the job properly you could always pad the timeframe you tell a client. If you think a project will take you three days, tell them it will take five. It will allow you extra time if you need it. And If you complete it within three days, your clients will appreciate you even more.
Yes, there will be projects you will need to do in a short time. But remember episode 71 of the podcast titled Good Design, Quick Design, Cheap Design, Pick Two? If you rush a project, you are either producing sub-par work, or you need to make sure you are being compensated financially for the extra burden of turning a job around quickly.
Your best bet, avoid rushing.
Unlike traditional 9-5 jobs, home-based designers are almost always home. That knowledge will often lead to clients expecting you to be available whenever they need you regardless of the time or day. It’s OK if you want to work evenings and weekends but do you want clients reaching out and expecting replies during those times?
You need to set boundaries from the start. Let clients know when they can contact you and how they can contact you. If you have a business phone, it’s not OK for clients to contact you on your home phone. Same goes for email. Clients should not be contacting you on your personal email.
Remember, this is your business. Your clients are just that, clients. You work on your terms, and you get to decide when it’s appropriate for clients to communicate with you and how clients should contact you.
Avoid being over accessible.
At the top of this article, I talked about how you should avoid slacking off. The opposite is true as well. Without the regiment of a 9-5 job, many freelancers or home-based designers tend to overwork themselves, working more extended hours than an agency or in-house designer.
Working long hours adds extra stress and could compromise your creativity and lead to burnout. You need to step away from work on a regular basis. A healthy social life is vital if you want to be a happy and healthy designer.
Enjoy your evenings and weekends. Spend time with family and friends. Separating your work and private life will help both your business life and personal life success.
Boost your motivation and avoid overworking.
Designers by nature are critical people, and I presume you are no different. You never settle for what is good enough when you know you can do better. It’s what makes you great at what you do and It’s the the reason clients keep coming back to you.
You are a problem solver. But the key thing to remember is that problems are not always correctly defined. Meaning the problem a client comes to you with may not be the actual problem they are trying to address.
A client may tell you they want more visitors to their website when in fact the problem is they need better visitors to their site. There are two options for every design problem presented to you. Give the client what they want, or give the client what they need.
Giving the client what they want is the easy route, but it doesn’t help you stand out from all the other designers out there. By digging deeper and giving the client what they need you will be making a name for yourself which will help the success of your business.
Question every design problem you face and see if there’s something more you can provide. Don’t limit yourself by just following orders and following the briefing word for word. Running your own home-based design business opens up a whole world of possibilities for you.
Take advantage of your position and avoid the status quo.
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My mailbag is empty, so there is no question of the week this week. Submit your question to be featured in a future episode of the podcast by visiting the feedback page.
Resource of the week Daily Logo Challenge
Like the title says, each day Daily Logo Challenge send you an email with a fun new logo design challenge for you to try. These are not real projects. These challenges are to inspire you and expand your abilities as a designer. You can share your design for community feedback to help you grow as a designer. Signing up at https://www.dailylogochallenge.com will get you 50 days of design briefs.
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Running a graphic design or web design business all by yourself isn't easy. If there are any struggles you face running your design business, please reach out to me. I'll do my best to help you by addressing your issues in a future blog post or podcast episode here at Resourceful Designer. You can reach me at feedback@resourcefuldesigner.com