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How Do We Figure Out What to Charge for Our Work, Anyway?

Written By Stacy Nguyen | Jul 26, 2022

When a bunch of creatives get together to socialize, it’s pretty easy to exchange thoughts and hot takes around the Pantone Color of the Year or whether Comic Sans truly deserves the bad rap that it got, but you know what rarely gets discussed? How much we’re all charging for our work and how we arrive at our numbers.

Money is often hard to talk about because we’re so socialized to conflate how much we earn with success and our worthiness. I’m no exception to this. I feel awkward talking about money all the time! I don’t want to seem like I’m bragging when I assume that I make more than whoever I’m talking to, and I don’t want to seem like a loser who is bad at business when I talk to someone who seems to make more money than I do.

It’s very important to get comfortable talking about money because of ongoing pay gaps, lack of access to opportunities, and also lack of information.

However, as a woman of color, I’ve also learned that it’s very important to get comfortable talking about money because of ongoing pay gaps, lack of access to opportunities, and also lack of information. I can’t even tell you how many times a client has told me I was the lowest bid on a project and that I was underselling myself.

Here are some things to think about when charging for creative work.

Charging an hourly rate

When I was starting out, this was the method I used. I read a bunch of articles about how to decide what your hourly rate should be. The prevailing advice was to figure out how much you want to make annually — including overhead, taxes, and insurance — and then divide that number down to an hourly rate, based on how many hours a week you realistically estimate you’ll be working.

I found this method to be difficult because it had so many unknown factors (like, I had no idea how much I was gonna work each week on average, because I had no track record and no idea who was gonna hire me). I also found this method to be hard for my clients because they had no idea how many hours I would take to build a website or to design a flyer for them — my rate was kinda meaningless to them.

Plus, I’m not good at tracking hours. It was boring, so I often forgot to track all my hours. And then I found that as I got more experienced in my work, I became more efficient at doing things, thus I was billing fewer hours. I kept having to increase my rate all the time, and telling your clients you have to increase your rate again and again is unnerving to them.

This is why I moved to a per-project fee model and use it most of the time. However, I still pull out an hourly rate in certain circumstances.

  • When I have a long-established, ongoing relationship with a client and get work from them regularly — like at least two little projects every month — I charge an hourly rate because it’s just easier to, instead of constantly scoping and bidding itty bitty projects all the time.
  • Whenever there’s troubleshooting involved — like when a website does something wonky and a client asks for it to be looked at — I charge an hourly rate. In these circumstances, we usually cap the hours at like two of three hours. If the problem can’t be fixed by us in a set amount of time, then we probably need a plan B.
  • Whenever a project goes out of scope just a little bit, I charge an hourly rate for the overage. For instance, if a client requires a few extra rounds of edits.

Charging a per-project fee

Because most of my clients are sporadic and come to me for specific campaigns or for brand development work, I charge per-project most often these days. Per project is nice because it rewards efficiency, and it also saves me from the annoyance of counting hours.

Charging per-project is difficult when you don’t have the experience to do so, so that’s why it took me a couple of years of doing hourly work before I got comfortable charging per-project. It took some time for me to benchmark how much time things take.

Some folks are very precise when figuring out project fees — like they have line items for everything, from the cost of paper and ink to the cost of shipping. I used to think I had to be very precise like that to look ‘professional’ to clients. But then a few friends of mine shared bids that they got from contractors, and I learned that the way bids look can really run the gamut. Some people send in really detailed bids, and others send in very broad bids that say stuff like, “Creative direction: $5,500.”

Seeing that established fancy designers did this gave me permission and the confidence to send in really broad bids myself. I’ve also found that my clients generally don’t care about the minutiae. Think about it. When you hire a contractor to build you a deck, do you really care how much each type of wood and how much nails cost? I mean, I don’t. I just want to know what the big number at the very bottom is.

I think design clients are similar. They just want to know how much a website costs!

Charging a monthly fee

I have a few clients where my company does the same thing for them every month (usually social media). For these clients, we charge a retainer fee, which is basically a project-based fee that gets repeated every month until the relationship ends. Retainer fees are handy for ongoing, predictable work. Some months are heavier than others, but over the course of a year, it should generally average out fairly. (And if not, we can always renegotiate our rate at the end of a contract.)

So, how do you figure out how much to charge anyway?

Figuring out how much to charge is totally an inexact science, but the good thing about it is that when you’re freelancing, you have ample opportunities to practice and learn from past ‘mistakes.’ If you negotiated or bidded too low in the past, you aren’t doomed to be locked into a certain rate forever.

I have an unscientific and massive sliding scale, based on vibes.

I used to be more concerned about market rate and charging the same as the designer next to me — because my experience-level used to be at market rate and my work was indistinguishable from the designer next to me.

However, as I gained more experience and also naturally developed an aesthetic and working style, clients would seek me out because of my specific qualities. And that was around the time I started charging what-I-feel-like fees. These are amounts that:

  • I feel comfortable charging someone who has left their corporate job and has poured their soul into their business
  • Are high enough for me to bend and work with a moneyed client that I don’t feel that passionate about, to subsidize the passion projects
  • I charge simply because I like someone a lot
  • I charge simply because I think someone is going to be a little high maintenance

I know this answer is frustratingly devoid of hard numbers. But the thing is, it really depends. I can charge $65/hr for an organization or person that I think really can benefit from that rate, or I might charge $200/hr for something that will take fifteen minutes of really specialized skills.

Should we share our rates publicly?

I’ve seen many designers share their rate publicly, usually in the form of packages. Like, for a certain amount of money, you would get a specific amount of deliverables, always. That’s totally fine — but I don’t go that route because that doesn’t work for me. I don’t do packages, and I don’t have a menu of services, because every project is excitingly unique and special and different.

I also don’t share my rates publicly on my website for these reasons:

  • • I don’t want to start a relationship transactionally — I want to start relationships with conversation and connection, versus a number.
  • I don’t want folks to automatically rule out working with me because they think they can’t afford to.

Having a sliding scale is more equitable

I have an unscientific and massive sliding scale, based on vibes. You’ve probably gathered that I’m not really into spreadsheets and getting really detailed with numbers. I like people, talking to them, connecting with them, and feeling them out. Because that’s my strength and preference, I actually decide how much to charge clients based on how I feel about them and also how resourced they are.

Like, a client that is well-resourced and well-funded gets charged way more than a client who is paying for their dream out-of-pocket. Oftentimes, you can tell how resourced a client is — like, certain sectors like tech or healthcare tend to be well-resourced — but when I don’t know or can’t tell, I literally ask them what their budget is in our first meeting together. And then I decide if I can work within their budget and timeline.

We need to be more transparent about our rates

While I don’t share my rates on my website, I will share my rates with any creative who wants to have coffee and a conversation, and I especially prioritize women and BIPOCs because we tend to undersell ourselves.

I also seek out information so that I know what to bid when I’m stretching and doing something new I’m not an expert on. I ask my creative friends who are high up in their organization and do hiring, I ask my clients who went through a bidding process what the other bids they got looked like and why they decided to go with me, and I even cold-email or DM designers I think are super dope and gush about their work before I ask them for a sliver of their time and some advice.

There are a lot of articles out there that talk about the ‘right’ way to figure out what you should be charging, but I hope that by sharing my very chill approach, you get the sense that there’s no one right way to do it, no one right number to hit. It’s natural to experiment and try a few different ways before settling on a way that works for you.

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