There is no one way to price creative work. No two creative projects are alike So how do you go about pricing your work?
It's not easy working freelance, especially as a creative professional. You have to grapple with all of the usual questions and doubts that come with creative work. Will anyone want to hire me? Does my work measure up to my peers? Am I good enough to succeed as a creative?
(Spoiler: They will, it does, and you are!)
It's a stressful lifestyle. And it's not helped by the fact that pricing for creative work can vary wildly depending on a long list of factors. Location, experience, medium, and even your client's industry affect how you should be pricing your work. It's a complicated equation. But don't let this challenge deter you from pursuing creative work! In this article, we will review some of the factors that affect pricing and explain some techniques, strategies, and resources that can help you determine the market value of your work.
Factors That Affect Pricing
Some industries have standardized rates.
Let's start from the top and work our way down. In most cases, the most significant factor that will affect the budget of a creative project is the industry your client works in. Some industries, such as comic books, have relatively standardized rates for artists depending on the artist's experience. While this is not necessarily common, being aware of such standards (should they exist) can make pricing your work significantly easier and be the first question to answer.
What is your client's budget?
Always be ready, willing, and able to adjust your work based on your client's budget. For example, a hospital will most likely have a larger budget for a project than a pre-school. That does not mean that it isn't worth working with the pre-school. Negotiating a longer deadline, reducing the scope of the project, and limiting features are all examples of ways to compromise with a client's budget to make it easier for you to say “yes” to their project. Be aware of your client's industry and budget while negotiating your rate so that you don't set expectations too high for them or too low for yourself.
How long will the project take, and will it affect your ability to accept other projects?
Is the client giving you enough time to complete the work they are asking of you, or will the project force you into crunch time? Projects that demand all of your time for the immediate and foreseeable future limit your ability to take on other projects and should increase the rate that you charge. On the other hand, a project with a relaxed timeline might be worth considering a discount, as it allows you to fill in your schedule with additional work. One of the biggest challenges in freelance work is learning to balance the pipeline of incoming projects you have: it will benefit you, in the long run, to take a slight pay cut if a client is willing to work on your timeline.
Where do you live?
The landscape of modern freelance work is becoming more and more global, which can impact how individuals price their services, for better or worse. A potential client may compare your price with that from individuals who live in regions with a vastly lower cost of living than yours, or vice versa. Whatever your situation is, always be aware of your own income needs and stick to them. You are not helping yourself by accepting pay far below what you need to make a sustainable living. Likewise, a client who does not respect your income needs is a client you should feel comfortable passing over.
What are the cost of the materials, services, and tools needed to complete the project?
Not all creatives work the same. Two different artists can make similar images while using wildly different techniques and mediums. Some have recurring monthly costs, such as access to the Adobe Creative Suite, while others need to be aware of physical goods such as paint, film, props, or printing costs. Before you deliver a final estimate for your work, make sure you sit down and determine, to the best of your ability, how much of your own money you will need to spend to complete the project and factor that into your pricing.
Tools to Help Determine Your Pricing
Now that we've talked about all of the reasons that pricing your work is complicated, let's talk about some tools and strategies that can help.
Understand your process.
Every creative professional works differently. Even if you work in the same medium as a peer, your processes will quite likely vary, changing the time, energy, and materials required to make the same product. The better you understand your process, the better you will be able to estimate how much time and effort will be needed to complete the project.
Price your services based on your time.
There are all kinds of methods for listing the price of your services on an invoice, including hourly, per project, by line item, etc., but all of them should reflect the time and energy you put into the project. After you understand your process and estimate how long a project takes, make sure that the final price you settle on with a client is both respectful and a worthwhile use of your time.
Find your Baseline Hourly Rate.
The most simple method for determining your rate is to calculate it by the hour. While this may seem difficult, it's pretty simple. Based on a 40-hour work-week (50 weeks a year), $1 per hour translates to roughly $2,000 per year. Based on that math, if you hope to make $40,000 a year as a creative freelancer, your hourly rate should be $20 per hour. Remember to add to your calculations the cost of your material, fixed costs, overhead, etc. So if you want to net $40,000, you might need to gross $60,000 or $30/hr.
This system is not perfect, of course. In freelance work, you cannot guarantee that you will work 40 hours every week. Sometimes you will work sixty hours, and sometimes you will work zero. However, finding your baseline allows you to set a standard rate that you can negotiate up (or down, in some cases) based on the details of each project you take on.
Research average salaries with resources like Glassdoor.com
The internet is a powerful tool. It is brimming with information if you know where to look, and that includes average salaries for just about every professional and industry, all sorted by location. While we all want to rake in six-figure salaries, that may not be a realistic expectation. Using online career tools like Glassdoor.com or Indeed.com can help you gauge your peers' average salary. Use that information to help you find your Baseline Hourly Rate.
Consider your own experience and skill.
While experience may not flatly translate into higher rates, you should consider it when providing an estimate to a client. If you are regularly getting decent work at decent rates, you have less incentive to accept work below your Baseline Hourly Rate. Additionally, if you find that you are receiving too many client requests to complete, then your demand has reached a point where you should consider increasing your baseline. Once you get to that point, you'll likely have enough experience working with clients to confidently assess the value of your work and begin setting your rates as you see fit!