29 Nov What Should I Charge for a Logo?
What Should I Charge for a Logo?
What should I charge for a logo? What should I charge for a website? What should I charge for a book cover? What should I charge for a _________ ? Fill in the blank.
These are some of the most arbitrary questions that young designers face as they’re beginning their adventure into this crazy world. There are a couple of ways to go about determining this number, and none of them are easy.
If you find yourself scratching your head, sitting in front of your laptop, wondering, “What should I charge for a logo,” here are a couple ways to figure it out.
Also common sense.
Boom, that’s all, folks. Math and common sense. I hope you feel better prepared to bid on your project. Holler.
Here’s the basic math: take all your bills for the year, and add them up for the whole year. Double them because you’re going to lose almost half of every dollar to taxes. Then add 20% on top of that, to compensate for time you may have to take off. Then add $5,000 for operational costs, things like a new iMac, Adobe software, Pantone Color Books, hosting, domains, etc. Finally, divide that up by 52 then again by 40. That’ll give you a rough estimate for an hourly rate.
As an example, let’s say my bills are $5,000 per month.
$5,000 x 12 = $60,000 (bills for the year)
$60,000 x 2 = $120,000 (compensate for taxes)
$120,000 x .2 = $24,000 (compensate for sick/vacay)
$24,000 + $120,000 = $144,000
$144,000 + $5,000 = $149,000 (compensate for operational costs)
$149,000 / 52 = $2,865.38
$2,865.38 / 40 = $71.63
Then maybe round up because $75 per hour sounds better than $71.63. There’s no rocket science here, but what’s important is accounting for costs that you didn’t know of up front, so you’re not surprised with a kick in the rear end. You might also have some other expenses you need to tack on there – my example is just that, but the formula is the same.
There are also a few factors that can inflate this number. Maybe you’re not working steadily yet, or this is a side job; that could easily make the cost go up or down, respectively. Maybe you’re reaaaally new, and you don’t even think you’re worth however much you came up with. Don’t sell yourself short, and if you want some 1 on 1, give me a shout! I’d be happy to look at some of your work and ask some questions to help you.
The other thing that might adjust that number is, what’s the project? For example, I’m charging more to design a website than I am a visual identity, simply because the level of time and thought required are far greater. That’s where value comes into play, and that’s the second way of pricing things.
Brace yourself because this sounds sort of odd.
When you ask yourself, “What should I charge for a logo” (or whatever) follow up by asking yourself, “What would I trade for it?” Assigning a physical item to a project will help you determine its value. Putting yourself in the clients’ shoes, think what they might be willing to trade for it.
Continuing with the what should I charge for a logo example, what would they trade for that logo project? A car? Naah, probably too pricey. A steak dinner? Maybe a bit too low (depending on the restaurant). How about a living room set – couches and some end tables? Maybe that’s a bit closer? As you imagine yourself with an empty living room in exchange for some digital files, you might begin to agree with me, that this feels sort of strange, but I promise it helps.
After you get past that strange feeling, you’ll be able to come up with some sort of number. Then, reverse engineer that to see how many logos (or whatever) you need to be doing per year to reach the numbers you came up with above!
Again, not rocket science, nothing magical, but answering the question, “What should I charge for a logo” takes you thinking of things differently… If you’re going to come up with a number that makes sense, that is.
Once you’ve got your numbers, be confident when you go to share them. Hell, you did the math. It’s not like you just made this stuff up!
In closing, think about what I didn’t mention.
I didn’t say go check your competitors or charge what you see that work going for on some job site like Indeed.com. Here’s why. Your competitor has different bills than you, a uniquely different skillset, etc. And when you work for someone, the rate is drastically reduced because they’re paying (or helping pay) many of the costs mentioned above.
Finally, you might want to check out Dan Mall’s Pricing Design. All of the A Book Apart books are terrific, concise, quick reads, and they’re worth it. Go on and splurge – spend that $8 on yourself. My web-dev buddy Jerry turned me on to that book a while back – thanks J-dawg. *Dap*
The counterpart to all this pricing stuff is building trust with your clients. We’ll talk more about trust in the next blog.