The art of pricing your freelance services has proven to stump creatives again and again. Price yourself too high and you might scare clients away. Price yourself too low and you can’t pay basic bills.
In my experience, pricing has more to do with self-esteem, self-confidence, and self-worth – than the “going rate” or the numbers.
That being said, most creatives project these self-doubts by underpricing themselves, which results in failed creative businesses.
For me, determining pricing as an illustrator is made up of three elements:
- Your costs of doing business and living
- Your quality of work
- The value of your creative solution to your client’s problem
As an illustrator, your income must be capable of covering your expenses and turning a profit.
As an example, I’m going to illustrate a the pricing model of a fictitious illustrator and designer.
Let’s say her name is Stefania.
Stefania is an incredible illustrator. She’s worked for Disney for the past four years but she’s now ready to go out on her own. She’s creative by nature so she struggles with the business stuff.
As she set out on her own, she determined that it costs $900 per month to run her new venture. These expenses are made up of rent at a small co-working space near her home, various software, a monthly fee for her accountant, and a variety of tools and supplies. (This doesn’t include her living costs.)
Now Stefania knows she’s a good illustrator and designer. She’s not new to the game and she’s aware that her work is stronger because of her insights on animation process, story, and interactive media. She also knows that the going rate for four and five-star illustrators is around $100-$200 per hour.
Stefania received her first inquiry. It’s a big project designing characters for an upcoming mobile game. But Stefania is struggling to price the project correctly.
Here’s what I (Chris) would tell her:
Define your rate: This will be the foundation on which we will build your pricing. (Let’s say it’s $450/day for Stefania.)
Estimate the total hours to finish a project: Remember, this isn’t simply creative time. This includes phone calls, emails, revisions, and final file delivery most new artists forget to include. Let’s say this project estimated at 14 days and Stefania a project estimate of $6,300.00 USD
Build in your profit: Most creatives simply trade their time for dollars. However, if you follow this step, you’ll sway to being more of an entrepreneur than a freelancer on an assembly line. To do so, simply add a 10% profit margin on top of your current $6,300.00 bid. In this case, it would be an extra $1,250 bringing Stefania’s project total to $6,930.00
You might think that’s a bit random. But building a real business requires you to make a profit. That means as a creative freelancer, you must learn to earn some portion of your money without doing any work. You can’t exchange time for money your entire life.
You need to have money to reinvest into your own business or other investments.
Remember, you didn’t start your art business to be your own employee. You started your creative venture to bring your own ideas and products to life, to eventually add products, and to provide a sustainable income (without depending on all of your time) for your family, lifestyle, and freedom.
Remember, strategically pricing yourself doesn’t have to be a guessing game. But more importantly, it doesn’t have to be determined by a lack of confidence either.
A cheap price screams low quality.
Someone who pays you a low fee will NEVER pay you a higher fee later for the same type of work.
You don’t have to always have the lowest bid to secure a project. You’re worth more than you think when you can communicate via your portfolio and conversation that you understand your clients creative problems and that you’re the expert creative to solve them.
Be prepared, be organized, be confident and drive your inner doubts away.