How do you appraise your own degree of skill and experience as a creative professional? Working out what to charge is one of the trickier aspects of starting out as a freelancer.
What to charge can vary a great deal depending upon your level of skill and experience: you may have come straight from university with limited industry experience, but possibly a lot of up-to-date knowledge and raw inspiration, or you may have been working in a salaried job in an agency or client-side for a long time, but your skills might be limited to one particular area, such as print.
We’ll help you to examine the factors that influence the graphic designer freelance rates you can charge a customer or client.
Projects vary. You could quote for a job on a long-term contract that commits you to a period of weeks, months, or perhaps longer, or the work may take just a few days or even hours.
In the first instance you will need to get a full understanding of what the project involves. Will you be working on-site using client resources and materials, or will you need to acquire your own cutting edge 3D modelling software to complete the project? In a longer-term project you will need to look at the client’s desired outputs and supply a quotation based on the time and resources you need to execute these. Often the client will say what their budget is, so it’s up to you to set realistic expectations about what is achievable within those parameters.
For a project that will take days it makes sense to give the project the same careful evaluation to ascertain its scope before offering the client a realistic time frame for its completion. In this scenario you will offer a day rate.
If you’ve been an employee for a while and you’re used to getting your net pay straight into your bank account each month, it’s easy to forget that your actual gross pay is higher and covers your national insurance and tax payments, as well as any other repayments that are due, such as student loans. When you quote it’s essential you factor in the costs your employer would previously have paid from your salary on your behalf.
Don’t forget to account for the costs of running your business too. Business overheads extend to rent, utilities, equipment, materials and other resources. Obviously you won’t need to specify these on an invoice, but when working out your rate consider the set up and running costs of your business before your ‘take home’ pay - the money that affords you to live. Administration, bookkeeping and your own business marketing requires your time too, so be sure to account for these annual running costs in the rates you set.
Employers factor in the cost involved to them when an employee takes leave for whatever reason, whether sickness or maternity. When preparing for a freelance career it’s important to consider leaner times, and when it might not be possible to work.
There are further running costs to consider too. If you offer a professional service for which your expertise and advice are required, then it is helpful to have professional indemnity insurance . This insurance covers you against compensation claims that arise as a result of errors or omissions with your work, in particular if problems cost your client money or status.
Freelance graphic designer rates vary to some extent depending on where you or the client is located. London-based creatives can expect to charge more due to ‘London weighting’, the increased charge factored in to accommodate the much higher cost of living in the capital.
Thanks to the increased options for remote working, quite often London-based clients will outsource work to creatives from outside the capital who may charge less.
Graphic design is a competitive area to work in, and often you’ll find that the agency or client will set the price they would like a supplier to work for. However, you may also quote your hourly or day rate, which may be informed by:
Take into account the above along with your annual business expenditure and add this to your desired salary (the amount you could reasonably live on according to your lifestyle expectations, skills and experience). Next, work out how many working hours you can reasonably commit to per year, factoring in slow periods like Christmas and summer holidays.
Depending on your experience you should estimate what percentage of your time you are likely to realistically be employed each week, so perhaps 60%-70% of your time for a designer with regular clients, and more like 40%-50% of the time for a recent graduate. For example:
You would like to be available to work 40 hours per week, for 48 weeks of the year, and you anticipate being busy for about 50% of that time. Therefore your annual billable hours could be: 48 x 40 x 60% = 1,152 hours per year.
From here you can calculate your daily and hourly rate.
Let’s say your total annual expenses (including your desired salary) is £30,500k. Divide this by the number of billable hours and you get £28 per hour or £212 per 8 hour day. You can tinker a little with these figures to make them more ‘rounded’. Remember, this figure covers everything: your tax, your business running costs - the lot, so it’s reasonable to ask for it.
When living costs go up, your costs may need to go up too. Unfortunately this fluctuation can influence a company’s bottom line, which may mean they bring their work in-house or look for cheaper suppliers. Therefore, getting the balance right between what you can realistically afford to charge, without pricing yourself out requires careful thought and research.
Other occasions in which you can increase your rates might be influenced by your degree of experience. If you go from a junior designer, to a middleweight, to a heavyweight designer then you can legitimately increase your rates. If you win awards or develop new skillsets that mean you can fulfil more challenging requirements, then again you can legitimately review your rates.
When you’ve come to agreement with your client, be sure to get the commitment in writing with the specifics clearly outlined so there can be no confusion.
When you think about the energy, time and resources you put into building and sustaining your freelance business, you’ll want to be sure you have the right level of business insurance to cover you should there be any unexpected complexities. Get a business insurance quotation from us today.