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Imagine if you didn’t have to worry about pricing so you could focus on creating a life-giving design studio. By the end of this post, my hope is that you’ll gain confidence for how to price your design services based on your unique goals, capacity, and expertise. Make sure to read until the end to access your free Sustainable Pricing Calculator!
Alright! Let’s dive in. Pricing. It brings up a lot of emotions, right? It’s the number one challenge I hear with designers in their first few years of business. Some methods of pricing include hourly-rate, flat rate, day rates, and value-based pricing. Some of these may work great for your business. But today, I’m sharing my unique approach to what I like to call Sustainable Pricing.
My Approach to Sustainable Pricing
Sustainable pricing is a way to feel confident and compensated when charging for your design services. I’ve tried all methods of pricing, taken courses on pricing, and I’ve had many successes and failures along the way. Through that experience, I’ve developed my own process to help me know that my time investment and income is growing my business. All while delivering high value projects with a great ROI for my client’s businesses.
01. Getting Started with Your Budget & Goal Income
My first tip with pricing – start with your budget. I know, as designers we’re creatives, not numbers people. But trust me. This is the first step to understand how much work you need to take or when to book a project into the next month.
Pro Tip: I would highly recommend hiring a financial advisor if budgeting is not your thing.
To find out your personal budget, make sure to add up all your personal expenses per month. Then, you want to calculate your savings per month as well. Set those two numbers aside and multiply them by 12 months to get your yearly totals.
Then, we want to figure out your yearly business budget. Add up all your subscriptions, courses, or any other business expenses that you have planned for this year.
Pro tip: I would recommend adding a bit of a cushion for unexpected expenses.
Finally, we want to make sure to add in your taxes. This will depend on what state you live in, so make sure your number is accurate for what you need to set back. Add your Total Personal Budget to your Total Business Budget. Then, multiply the total with the tax percentage to find out what you should prepare to set aside for taxes. Finally, add that number to your Personal and Business budget to get your Goal Yearly Income.
Example:
$55,000 (personal, savings & business budget) x .20 (20% deducted for taxes) = $11,000
$55,000 (personal, savings & business budget) + $11,000 (taxes) = $66,000
Goal Yearly Income = $66,000
Remember, this is your goal yearly income, so don’t get overwhelmed or stressed if you don’t meet your income goals every month. In the world of freelance, you will have slow months and abundant months. The important thing is to make sure you’re setting aside the extra money from more profitable months or adjusting your expenses when you’re in a slower month.
Let’s break $66,000 into a yearly project goal so it feels a lot more doable.
$3,500 – Branding (7) – $24,500
$4,500 – Websites (7) – $31,500
$2,000 – Design Intensives (7) – $14,000
= $70,000
This is an example, but it helps you to understand your capacity and project needs as you grow. As you elevate your services, refine your skillset, and grow in your experience, your pricing should reflect that value as well.
02. Determine your baseline, good, goal, and profit.
Have you ever overbooked out of scarcity thinking that there may not be another client the next month? Another major problem I see with designers is not knowing when enough is enough. I’ve worked the 80+ hour weeks and it’s not worth sacrificing what matters most. Time with God, others, and taking care of your health.
So from the numbers we found out from above, let’s figure out your baseline, good, goal, and profit numbers.
Baseline: This is your monthly needs for what you need to pay your bills each month.
Good: This number includes your monthly needs, savings, and taxes.
Goal: This number includes your monthly needs, savings, taxes, and business expenses.
Profit: This number is above your goal. It covers all your monthly needs, savings, taxes, and business expenses. This is the extra money you can put in your reserves to compensate for a slower month.
From these monthly income goals, you can determine if you need to push back a project for the next month or the current month. This has helped me deliver high quality work because I have more focus and energy on each project.
03. Get on a call with clients and talk about pricing.
My last and biggest tip when it comes to pricing: talk about pricing with your clients on a call. Your client is making an investment in your services and they want to work with you. Getting on a call builds trust. And you can understand their unique goals for how to structure their project.
Some of my favorite questions to ask on Discovery Calls are:
– What impact are you hoping this project will make in your business or what problems are you hoping it will solve?
– What have you tried so far to fix this on your own and why do you think that I’m a good fit for your project?
– Most projects that I have done similar to yours have cost around $XXXX, does that work for you?
After the call, you can send your client a proposal outlining an essentials, signature, and premium offer. Make sure to either have a follow up form or call with them to talk through any questions and confirm the project.
Access the Sustainable Pricing Calculator for Designers
As you continue to grow in your design business, your pricing will grow as well. You want to make sure that your pricing reflects the impact it makes for your client’s business while meeting your unique financial goals.
Sustainably scale your design business, gain confidence with pricing, and get clarity on your services. For a more in-depth pricing strategy, access the free Sustainable Pricing Calculator for designers.
