Graphics Reference
In-Depth Information
Calculation Based on Real Needs
Hereisaformulafordeterminingyourhourlyratebasedonyouractualcostsofstaying
in business.
It's not the only way to determine an hourly rate, and it doesn't factor in the value of the
work to a client's business or a premium for your expertise; it's merely based on actual
economic needs.
Reviewing Pricing
Designersmustknowtheirhourlyratetosettheirfeeforparticulardesignjobs—both
the breakeven hourly rate to understand the lowest fee they should charge, and the pub-
lishedhourlyratetoallowforprofitandtaxobligations(seepage95).Calculatingafee
usingbothsetsofratesshowsyouwherethejobmustbepriced(breakeven)andwhat
isanoptimumprice(publishedhourlyrate).However,itishardtoknowexactlyhow
many hours it will take to do any design project. Therefore, any estimate based on hours
is just that: an educated guess on the duration and complexity of the work. As such,
pricingjobsstrictlyonhourlyratesisnota100percentaccurateapproach.
Evaluating Your Calculations
To get a more well-rounded view of pricing, review the project total you calculated using
yourpublishedhourlyrateandaskyourselfthefollowingquestions:Doesthistotal
reflectthevalueofthisworktotheclient?Doesitreflecttheexpertisewebringtothe
project?
Canwegetmoremoneyforthisjobbasedonwhotheclientis?Inotherwords,isthis
clientasmallregionalstartupcompanyorawell-fundedmultinationalcorporation?Little
businesses typically have little budget, and big businesses should have a big budget.
Whathavewechargedforsimilarprojectsinthepast?Howisthisprojectthesameor
differentfromthose?Isthatreflectedinthispricecalculation?
Whatdowethinkourcompetitorswouldchargeforthisproject?Whydowethinkthat?
Canwediscussourcalculationwithanyone?
(Talkingaboutpricingdesignwithacolleagueortwoisfine.Note,however,thatinmost
countries, banding together as a profession and determining an industrywide price is
illegal.It'saformofcollusioncalledprice-fixing.Thisiswhydesignorganizationsasa
grouprarelydiscussinpublicorpublishpricinginformation.)
Isthereanypublishedinformationonpricingforthistypeofwork?Forexample,the
Graphic Artist Guild's Pricing and Ethical Guidelines publishes rate information. The orga-
nizationpollsitsmembers,hasthempricecertainkindsofprojects,andthenpublishes
that information. It can legally do this in the United States because it is a trade union,
anditoperatesunderdifferentlawsthannonprofitdesign(arts)organizations.
Doesthispricecalculationseemhighorlowbasedonyourgutinstinct?Howshouldit
beadjusted?
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