Tag Archives: design fee

Design & Money: Understanding Value

Dear readers, I was given this opportunity, probably once in a lifetime, to write an essay on Design & Money. I was assigned to do it on a voluntary basis or in much more simple constructed words: “Do it for free”. I accepted those terms. To bring more transparency, I need to break down the concept of “Design & Money”.

Image1

Design has nothing to do with money — nothing at all! Design is a state of mind, a creative process of continuous development and improvement. Design is like art — a way to shape history; pointing out its beliefs and to be able to come up with great solutions that are practical and useful for that specific time-period. What’s important during the process is to accept the flow that makes it possible to bring great ideas to life. Ideally, design is about ideas that affect our present and how we create an idea for tomorrow, how we come up with meaningful solutions for the client, for the primary target, for the one who it might concern, for ourselves and for the purpose it’s intended to be used. Design is important from the perspective of profiling, understanding the market and applying a good quality aesthetic solution that the customer and market can accept for the reasons given in the context of a mission. Design is exactly what you think it is — You might be wrong but you should better try it first.

Money has nothing to do with design. It’s merely a tool of the trade; it reciprocates value for value. Money is not a concern except for those who wants to discuss the graphic and illustrated shape of money, but that’s another case. As a designer, you hold the most important tool in the process — the gift of accepting and converting a client’s need to a practical and useful design. Design has nothing to do with money but everything to do about creating a value.

In times of change we are forced to understand what value truly means and learn to be more flexible and be aware of the role of designers and money. This is increasingly true due to the fact that internet has emerged a powerful connecting tool in the recent years. From where I work I hear more and more often about businesses ordering their work from a wide range of countries were the pay rates are a bit lower compared to my country and companies are grabbing such opportunities of outsourcing their work, all in the effort to reduce costs.

Since a few decades it has become cheaper to print books in other countries and have them shipped backed again. Although we we have some great paper production companies and distributors over here it all boils down to the salaries of the workers, the stock and the rent. This will change further when the new digital reading tools are established and accepted on a broader market, and this in turn make printed material more or less confined to information-material or advertising & packaging design or exclusive printed books. How will this affect us as designers? What choices will we make for our clients? What’s the best medium of presentation for our clients’ needs? How can we take advantage of that knowledge?

We can, of course, give ourselves a greener world with digital distribution and online or offline digital design. When it comes to design and internet we will experience a wider market, when it comes to value and money we will experience a great change in competition since it will include designers from other countries taking part and offering services at their rates. More or less we are pushing ourselves towards a larger equality in the world economy and we need to keep in mind what the regular accepted costs are in other countries. But there are also other aspects than just world economy, an that is “The value of good design”. What are the customers buying? For what use and purpose is the intended design? Everything has a value and from a more interesting perspective it is the knowledge of how to create good design that fills and works for the consumers’ needs and in the best cases also gives other benefits. In those cases it will be more interesting as a designer to be not only talented but have a good reputation in the fields of quality and services as well as the costs. For some it will be better to accept royalty and licensing fee as additional perks. A third aspect is how and what regulates the copyright and how it changes depending on what country the designer or artist comes from. This will probably be a tricky part since not everything is bound by the Berne Convention and also it can be alarming for a customer who is not aware of how and where it can be used.

And then there is reputation, which is really hard to get. Even regular customers aren’t ready to spread your work by word-of-mouth unless they can find a value in endorsing your products. It only works out if you’re already popular and then customers use your name as another brand they own. Small firms have nothing to loose but larger corporations with more customers will either have to offer products and services at higher prices or have longer waiting lists depending on how many orders there are assigned to a designer.

Recently I got hooked up in a long conversation about customers who start their request with a “zero budget”. They would only pay the designer as much as a “bravo” or a handshake or tapping on the shoulders. It’s so easy fall for this simple trick. Either they will get a yes or no, or at least they will try to have a dialogue and get it for a bargain. They don’t want to pay what it usually costs. Working with such money-grubbing clients or working for a bargain or free doesn’t make a brilliant business model. In such cases its best to offer a royalty-based solution where your design fee depends upon the sales or plainly offer your services at your real prices with a no thank you note until they have come back to their senses; their needs won’t have gone away but they might just be forced to change their minds.

Clients know their budget and the possible earnings from their investment. As a designer it’s important to understand that as well since that’s the key to discuss proper payment. It’s also important to keep in mind all other factors that can affect the final design solution such as how the market will react, who the target audience is, how they will react to the design, the colors, the shapes and the messages being conveyed by the business. Another key to understanding value of your design is to research different economic and geographical regions, the standard practices and prices there. You should also include a legal disclaimer that prohibits the use of your design until the final payment is made.

Knowledge is the key to good service. Get the necessary knowledge and be service-oriented. But make sure that you don’t lose your time — which is now. It is in your hands to find and create value.

[hr]

Image2

Magnus ‘Mojo’ Olsson
www.upphovsman.se
Swedish Illustrator, Artist and Graphic Designer

Money & Design: How Much?

“How Much?”

Two words that have echoed all my professional life.

As young designers, we always knew what we were worth for a client: the value we would bring to his business, the increased brand value, the costs we would save for him but when it came to costing our own efforts to achieve this, we were hopelessly out of sync.

Years ago, I was called upon to do the product graphics and colour schemes for a tractor. A large industry with heavy spending on a research centre, it was an ideal client to have. The briefing was professional, the meetings were cordial, till the time came to discuss the quote. “ You would charge that to put just a few lines on the tractor?”, I was asked. “If it is just a few lines, you would have done it yourself, “ the young blood in me retorted. I dug my heels and got what I wanted.

But I have not been so lucky, all the time. In fact, most often I have been cajoled, requested, brow-beaten and bullied into accepting a lower fee.

“We cannot afford it now.”

“Let’s start with this, for now”

“We are not a corporate company with unlimited funds. We are an NGO.”

“We are not an NGO with foreign funding. We are an industry.”

The reasons were many. The excuses were endless. But it is rather clear: most people don’t want to pay for design. It is not like they do not have the budgets. Design is not perceived by many, as a service worth paying for.

These are the same clients, who would rather pay celebrities to endorse ordinary looking products, paying millions for the endorsements. Bag-makers are known to spend more on Bollywood stars like Kareena and John Abraham than on product designers. Appliance makers believe that paying cricket players like Dhoni a fee, is money well-spent, than spending on product development.

These are the same clients who believe that making an ad film and releasing it across all the satellite channels is a necessary investment for marketing than spending on appropriate design that will do the marketing itself.

These are the same businesses that understand stardom, more than value. It is the absence of star designers like a Karim Rashid that is also affecting the economies of the design industry.

Add to this, the fact that the design fraternity is small and fragmented. There are no stars. There are no rules. Each to his own. The professional bodies are also not making an impact, yet.

There are no minimum or maximum fees. I have had instances where designers have known to quote ridiculously low or exhorbitantly high fees. This may also be because of no minimum standards of work.

Designers, often do not have the patience to invest in a client. To give him value. To demonstrate the value created. To educate him on the profession. On why we charge the way, we charge.

When that happens, clients begin to look at you as a resource. That is when, designers will be called upon to develop new stuff when a business is set up. They would look upon you as problem solvers. And not as vendors. Or suppliers. Or contractors.

I am not surprised that clients find it easy to allocate money for vendors and contractors. There is no ambiguity in the product specs. If it meets the specs, you pay the value.

But good design itself is ambiguous. The value of good design will be felt much later than sooner. As a society that is so used to ‘making-do’, the importance of good design is hard to understand.
So, how does one get what we deserve?

  1. Spread the good word. Never lose an opportunity to disseminate the idea of good design.
  2. Discuss money with fellow designers. This will help understand if one in under-charging or over-charging.
  3. Do good work. Even for clients who pay less. This pays off in the long run.
  4. Build a design-aware constituency. When people appreciate good design, they would demand it.
  5. Get professional fees for design. Do not disguise it in implementation, publication or contracting expenses.
  6. Do not settle. Over time, people will understand why you charge the way you charge.

Till then, keep your chin up, when faced with the question: “How much?”
[hr]
Bala_profile

A Balasubramaniam is one of the early graduates of NID, (National Institute of Design, Ahmedabad) having specialised in Industrial design. He is known for his work in both the industrial sector and the crafts sector having done projects with Eicher Tractors, Eveready, Hero Motors, Usha, Crafts Counci, DC Handicrafts and the UNDP.

He has been involved in institution development as well, having headed the Fairtrade division of Oxfam, GB in India; co-ordinated setting up PRIDE, a design excellence division at NSIC; and led the design team of bamboo design and development projects in the North East for UNDP.

His foray into design education started with NIFT Delhi and he went on to teach and be a jury member in all the major design institutes, including NID, NIFT, SPA and IILM. Till March 2010, he was also heading the IILM School of Design, Gurgaon as its Dean.

He is the founder of January Design, a consultancy that works mainly with design and strategy projects for the MSME sectors of the industry, grass-root innovations and the crafts sector. He is also a consultant to the National Innovation Foundation.

He regularly writes on design issues in Times of India, Economic Times, Pool and other major design publications. His blog, Design Thoughts is popular for its cryptic commentary on the Indian design scenario.

Feel free to send him a mail.

How much should I charge for a design project?

Students, freelancers, young designers and upcoming design studios face this dilemma quite often: how much should we quote to a client? Most of the times designers are clueless about how a particular design project should be billed. People often scour the internet to find answers and what they mostly stumble across are websites that claim spit & polish for 99 dollars or on the other hand they come across case studies where agencies made millions redesigning something. That doesn’t give a very clear picture, does it?

If you try asking a designer directly, say on facebook, “How much do you charge awesome sir for the fabulous work you do?”, chances are you wouldn’t get a straight answer. Nobody wants to spill the beans so easily and also, there cannot be a straight answer to such a question. You see every design project is different and there is nothing like a simple identity design project, if you ask me.

I started freelancing while I was in college. It was around 2004 that I began designing logos. I was also, clueless about how much a logo should cost or much I could make doing a brochure. However, for me there was a higher interest, if I dare say now, I was then, still practicing the craft and honing my skills. It was more like a paid learning exercise for me. It worked for my clients as well—they didn’t want to spend a lot of money getting a logo made and I could also keep my conscience clean as I knew I wasn’t overcharging for what I delivered that time. Still, I had figured out a crude method of deciding the charge. Sometimes I would see how much time and involvement was required on my part and at other times when I was doing a logo for a restaurant, I would just go through their menu and see how much a tripple chocolate sundae costs there.

During the next 8 years I did many more projects and now I was dealing with a larger variety of clients — from real estate developers to venture capitalists, from educationists to medical equipment manufacturers. Reading a menu wouldn’t work now so I devised a method of calculating a fair price for my work. As I said earlier, every project is unique so this isn’t certainly a formula but I sincerely hope that it can be put to use by those who every now and then find them in a situation where they don’t know how much should they charge for their new project. So here it goes, the simple guide to an honest invoice:

  1. Experience counts: yes it does, if you’re still in college, you certainly cannot charge as much as a full time designer would, who has been sweating his grey matter for the past 10 years. So rule number one—the more experience and the more projects you have under your belt, the more you can ask for. However, the kind of projects also matter. A brochure design for your favorite Aunt’s boutique doesn’t equal a brochure design for an airlines. But then how much can you charge? Read along…
  2. Involvement matters: how much of your time will the project take up? Is it going to be a weekend job or will it require constant participation for the next two months. Obviously as a student you wouldn’t take up projects that require a full time commitment, however, as a freelancer or a new studio you might be getting into one. If that is the case please read the following points carefully;
  3. What am I worth: No this isn’t a spiritual question; what I am referring is to your market value. No offense here, but you have to decide what you’re worth. Say, if you were to take up a job now, what would you be honestly getting paid as a salary? If that’s something difficult to determine then take a look at your qualifications + experience and head over to a job site. Say if you hold a diploma from a design school and have been freelancing for 3 years, look up any job site and see how much they are willing to pay to such candidates. Now suppose with your qualifications and experience, the best offer you could get is of Rs. 45,000 a month, then that’s your current worth in the job market. In other words, if somebody is employing you for a full month, you at least expect to be remunerated that amount. We can also call this your minimum price or the lowest bid you’ll ever make.
  4. How much time will it take: Now moving on, say you finally got that project to do a logo for ‘Happy Tummy Ice Cream’ or you got a deal to do a set of 20 illustrations for the book ‘Why Little Kids Are Afraid of The Dark’. You have to do a time estimation for yourself and also for the client. For the logo, suppose the client is looking for 5 options and then he’ll be picking out three from which you’ll both finalize one brilliant logo. Say you’ve got a knack for drawing logos, even then you’ll be churning out options at a certain rate and let’s say that rate is a logo in 3 days so for 5 options you’ll take at least 15 days, then say refining the logo would take another week and then there will be feedback from the client and time lost in convincing him what the best logo out of the lot is, let’s add another week for all of this. So now we know you’ll take 15 days + 7 days + 7 days = almost a month to do the logo with 5 options. Now you already know your net worth is Rs. 45,000 a month so you could pretty easily say that you’ll charge Rs. 45,000 for the logo. For the set of 20 illustrations: let’s say you take 2 days to do an illustration so 20 illustrations should take 40 days. There will also be feedback from the client so add another 20 days for that. So it means you’ll take 2 months for the project. But, you’re also doing a book cover and another website along with this project. Say for the website you’re getting Rs. 15,000 and for the book cover you’re getting paid Rs. 20,000 so you’re already making 35,000 for the first month. So for the fist month your deficit is Rs. 45,000 – Rs 35,000 = Rs. 10,000 and for the next month you’ll be completely focusing on the illustrations so you expect a full remuneration of Rs. 45,000. Therefore, you would now quote Rs. 10,000 + Rs. 45,000 = Rs. 55,000 for the project and not Rs. 90,000. If you were working on only this project full time, you’ll certainly finish it early. Stil this is a rough approximation. If you have a pretty good client aka a rich mogul then you could charge more but bear in mind that most distinguished clients wouldn’t have approached you (a freelancer or a student) if they wanted something done.
  5. Market situation: We all know that warm beer is pretty bad, you know what else sucks? The economy or so people have been saying or using that as an excuse. Still, this is something you might want to consider. Say you’re working for the hospitality industry and your client runs a hotel and you really know that hotels in West Virginia have had a lean season, then in such a situation you’ll have to be considerate. A hotel wouldn’t be making as much money in West Virginia as one would make in Las Vegas and if the hotels is listed in CheapHotels.com you know what to expect. In such a case I would suggest you stick close to your minimum price as discussed in point number 3.
  6. Aftermath: So a logo is a one time process, right? Wrong… in most projects the client will expect you to provide some sort of after sales service. You might get a call some day and the client may complain that he’s not able to get this thing printed on a high gloss plastic coated card. So you’ll have to take out time, maybe a day and explain to him that this logo isn’t supposed to be printed on a plastic coated card and that hand made paper might work better. This will take time and your involvement. So if you’re apprehensive about providing customer support to your client, then do add this on your bill so you’re not frustrated later. Now your monthly asking rate is Rs. 45,000 so your daily wage is Rs. 1,500. If you think the client may pester you for a week after you do the logo, then instead of charging Rs. 45,000 you should quote Rs. 45,000 + (Rs. 1,500 x 7) = Rs. 55,500 and you’ll be providing service + support with a broad smile.
  7. Where are you from: Say you’re from India and have just read an article on AIGA that says graphic designers make US$5,000 a day. Sounds ridiculous right? So should you charge that much? Yes & No. ‘Yes’ only when you are one of those designers AIGA is talking about and ‘No’ in most cases. US economy is different. A pizza costs much less here than it would in US so you’ve got to set your price accordingly.

I guess 7 is a good number for any list. Makes it look profound, like the ‘7 Spiritual Laws’ or something like that. Once again I’ll like to point out that this is not a formula but can certainly help you in asking a fair price for your work. Sending your client a good quote is important. If you get greedy and ask for a lot, you might end up losing the project… if you’re too unaware of how market works and in your humility and shyness ask for a price too low, you end up being exploited. Design is an honest profession or at least should be one and my only suggestion for students / young professionals is that put in your 100 percent, grow with each project and don’t hesitate to ask for what your work is worth. I hope this article was useful. You can post your feedback in comments below.