November 1, 2011

2 Cent Tuesday #1: Rates and Invoices

Welcome to today’s 2 cent Tuesday. I realize for most of you it is already Wednesday... but it is Tuesday here and I am still in full swing! Today's topic: How much should I charge and how do I explain my prices to my clients?

officeina_jarOffice in a Jar by Present and Correct

HOW MUCH SHOULD I CHARGE?

First of all, let’s start at the start. All freelance graphic designers charged little to nothing when they first got started. This directly reflected where they were as a designer – at the bottom. The first real job I took on while still in college was designing a wedding invitation. I designed, printed and assembled every invitation myself. Then I hand carved a linoleum stamp and personally inked and printed every individual enclosure. For hours upon hours upon hours of tedious work I charged $50. And when I was done I felt guilty asking for the check. HAHA! That makes me laugh today. But, I, like everyone else out there had to start somewhere.

Luckily for me the couple that I designed the invitations for were very grateful, so fun to work with and completely supportive of my creative ability. Also luckily for me not everyone I worked with after that was. I say luckily because this is how I learned to charge what I am worth. After that first great experience I kept charging almost nothing but I started to notice that some clients weren't always fun to work with. They started to ask for a million and one revisions. They wanted to see something just because they were curious about how it would look, not because they really wanted to use it. I actually had a client ask me to teach them how to do something so they could do it themselves (this last one really fried me). It got to the point where I felt abused and taken advantage of. I started to really hate what I was doing. When you undercharge for your services, and fail to communicate your expectations up front people WILL take advantage of you. Whether they mean to or not. And when you feel like you are being taken advantage of you start to resent your client, your work and then your life. So let go of your insecurities and the mindset that you aren't that good yet and start charging what you are worth.

My strategy for determining how much I should charge for my services is simple. I take into consideration two things. Number one – what is the average going rate for someone out there doing the work I am doing? And number two - what is my time worth to me? When I say “my time” I mean time with my husband, time taking care of myself, time with my soon to be new baby boy, etc. What is the price I need to be paid in order to feel good about giving up “my time?" Every time someone presents me with a project I ask myself these two questions. How Design has a great breakdown of Graphic Designer’s Hourly Rates. If after looking at that you are still unsure (or you are in another field of freelance) I strongly suggest you do some research into what the average going rate for some one like you should be. As far as how much your time is worth - well, that is not something you can Google. But trust me, at some point you have got to come up with a price that makes giving up “your time” worth it or you will be terribly unhappy when your client deviates from the project’s original path (and they will 90% of the time).

So, take a good look at your skills, remind yourself that your clients are coming to you because they cannot do this work themselves and you are worth every penny you are about to charge them. Then you should probably go ahead and add 10% to your price just for good measure. I know a lot of you are still undercharging. Of course we all have to start somewhere to gain experience but when you start to think that your client is a pain in your side you maybe just need to re-evaluate what you are charging and how you are communicating the terms of your services. It might be you, not them, with the problem. 99.9% of the time that I have done my part communicating my value and my expectations up front I have worked with amazing clients. Which brings us right to our next question.

HOW DO I EXPLAIN MY PRICES TO MY CLIENTS AND BILL THEM ACCORDINGLY?

invoice

You give them an invoice outlining everything in detail! After discussing the details of a project with a client I determine the total cost and write up an invoice. In my invoice I am very specific about the project timeline, the amount of revisions the client will be allotted, when they are expected to pay me, how they should pay and what they will be charged if they request any additional revisions. I also let them know what I will charge for every day that their payment is late. I go ahead and let the client know right away that I expect half up front before I even touch their project. I outline all of these things for every single project. No matter what. And because things seem to fall through the cracks sometimes I don't just stop there. I reiterate everything in an email. Later, when things start to deviate from the original course I refer my client back to these two documents and let them know that I was not originally commissioned for the task they are requesting but that I would be happy to do it for the previously mentioned agreed upon price. When a project takes longer than it should I refer my client back to the invoice and remind them politely that we are on a schedule. This system has worked very well for me. The only time it has failed is when I have failed to provide them with an invoice at the very beginning.

Don't know what to include in your invoice? Check outSmashing Magazine, they have a great article with tips and examples on how to invoice like a pro. Don't know where to start when designing your invoice? Adobe offers free Illustrator templates that allow you to customize an invoice for your business. My invoice is loosely based off of this design - it is clean, easy to read and looks professional. If you do not currently send and invoice at the beginning of every project start now. Send one for every project - big or small. It doesn't matter if the client is your 5-year-old niece requesting you design her birthday invitation, you should get in the habit of sending an invoice every time. I guess that last example was a little extreme but writing and sending and invoice every time will save you tears and frustration many times over.

6 comments:

Lauren Miller said...

Great post! It was super helpful. I'm a graphic designer and have struggled with invoicing/charging correctly. But, I really like the idea of sending an invoice ahead of time instead of a quote. I typically quote and then battle feelings of guilt when extra work was put into the project. I'm going to start doing things your way! I like it!

Rebecca Waldron said...

Great post! You wrote very candidly about things I needed to hear. We all need to think about what our time is worth and make sure the client knows what they're getting. Thanks for sharing your knowledge!

Chelsea said...

This is great! Thanks for sharing, lady! You are right on with everything you have to say! Thanks for sharing in such detail! Hope you and baby are doing well!

escalatorsescalarscalawags said...

im not a freelance designer yet, but i plan on pursuing just abt every career. thank you thank you sensible Jane.

kat_jackson said...

This information is invaluable. This has been the hot topic around our home for weeks now (months maybe) so it is great to get such honest insight. I think your clarity and detail on your invoices is genius and will definitely be kept in mind if we ever get to do our own!

stephanie joy said...

You are fantastic and this is wonderful! My invoices are so plain and minimal and I think kicking it up a notch like this will really eliminate any confusion and make me look more professional. THANKS!