10 Factors to Consider When Pricing a Design Project
January 13, 2017
Most creative types are, well, creative. And while that empowers them to make awe-inspiring designs, not having a business background can sometimes hurt in the highly competitive design industry.
Specifically, many creatives – many of which work as freelancers – have trouble with pricing. Often, they underprice themselves and don’t get what they rightfully deserve, which hurts their ability to build their business.
Design Consultant Terry Lane Stone looks to help designers along in that process with her LinkedIn Learning course, Running a Design Business: Pricing and Estimating. In one of her lessons, she outlined the five internal factors and the five external factors to consider when pricing your design project, and the questions you should ask yourself to determine how much each factor will affect the cost.
The five internal factors to consider when pricing a design project
The five internal factors to consider when pricing your design project and the questions you should ask yourself to determine how much they’ll affect the cost are:
First off, do you have the expertise to do the project, allowing you to start on it right away? Or do you need to learn some new skills or potentially hire someone to help you get it done?
Will you yourself be doing the work? Or is someone else going to help as well, and how much do they cost?
How much time will it take to do the project? Do you or your team have enough time to complete it right away? Or will you need to move things around or extend the deadline?
What are the client’s expectations for the project? Have you done something like this before and are you confident you can meet those expectations?
5. Cash flow
How much money do you need for materials to complete the project? What other checks are coming in? What are the financial requirements and obligations you are facing?
The five external factors to consider when pricing a design project
The five external factors to consider when pricing your design project and the questions you should ask yourself about the client to help determine the cost are:
1. Scope of Work
What exactly are we doing, meaning what are the specific services and deliverables required? How many revisions will be needed?
2. The client
Have you worked with the client before? If so, are they decisive or prone to revisions? Are they available? Are there layers of management that must be appeased or is there just one decision-maker? If not, what have other people said about working with this client?
What is the deadline? What are the interim benchmark dates? How many people need to approve the work for each benchmark?
Besides you, does anyone else need to work on this project? What will they do and what is their cost? How much of that will be covered by the client?
5. Supply and demand
Are there many competitors to the project? And conversely, how much do you need the work?
Obviously, all of these questions could either greatly increase or decrease the cost of your project. The point is to find a cost that works for you.
After asking yourself these questions, you might realize the project isn’t right for you or you might come up with a price you know they won’t take. That’s okay – it’s far better to miss out on a job than to take one and lose money on it or, even worse, damage your reputation because you don’t have the expertise or time to do it well.
Looking to build a full-fledged pricing and payment strategy for your design business that’ll best work for you? Check out Stone’s full course on pricing and estimating for a design business today.