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Pricing creative services like you know what you’re doing

Pricing your creative services. Is there a part of business that’s more confusing or fear-striking for creative business owners?

What I usually find is this: people get timid about charging for their work. Maybe they don’t want to be ‘greedy’, maybe they haven’t been in business for long so don’t think they’re worth much, maybe they underrate their own skills and value, or maybe they just have no damn idea.

So what do they do? There are a few things. Some people decide to charge an hourly rate to make the maths easy. Some people try and find out what competitors charge and then either roughly match (if they think their skills are roughly on a par) or undercut in a race to the bottom. And some people pull a figure out of the air that sounds roughly about right, but which isn’t based on anything other than a gut feeling.

Here’s why those aren’t great ways to approach pricing, and what you could try instead.

Charging an hourly rate for creative services

On the surface, this seems like a pretty good way to do things. It makes maths and invoicing really easy, and feels nice and transparent.

However. A lot of people don’t charge enough per hour. Being a creative business owner is very different to having a salary – suddenly you’re having to cover all kinds of expenses that an employer does, things like Kiwisaver and ACC and tax, not to mention your own coffee and toilet paper and electricity.

The other problem is that this method of pricing leads to a lot of clock-watching on both sides. Are you going to do your best creative work if you know your client is only expecting to pay for a certain number of hours? What if it takes longer than you estimated? Are you going to eat the difference, or expect them to pay more than they’d anticipated? It also puts a ceiling on your earnings – there are only so many hours you can work. Counter-intuitively, as you get better at your work, you make less money because you can do it faster.

And do you want your clients to focus on cost, or value? That’s the question.

Finding out how your competitors price their creative business

This one’s tempting and easy. I’ve definitely done it. Find out what your competitors charge, decide if you think you’re worth more or less than them, and price accordingly.

The problem here is that you’ve only got one part of the story. You don’t know what their overheads are, what they need to live on, how they feel about their own business. You don’t even know if their clients are actually paying those advertised prices. And how would you feel to know that you’ve based your pricing on someone who could have charged a lot more?

And also, are you accurately judging your skills against theirs? Do you really think they’re that much better than you that you’ll charge 50% lower? Is your experience and skillset worth more or less than you think?

The comparison trap is one that’s all too easy to fall into (it’s one of my own particular weaknesses) and it’s best to avoid it altogether if you can. It can be interesting to have a look, but don’t put too much stock in what your competitors are charging.

Pulling a figure out of the air

Some things in your business can be done on instinct. But for pricing you really need to have a plan.

Here’s what to do instead when pricing your creative services

Sorry, but this is going to take you some time, maths, and a bit of soul searching.

  • Look at your base expenses. Your web hosting, your premises (if you have them), your consumables, your subscriptions.
  • How much do you want to have for yourself? How much does your life cost you each month? Your housing, your utility bills, your food bills, all your household outgoings, your vintage clothing budget. I’m not talking about giving yourself the dregs that are left over at the end of the month, that gnawed, browning apple after your kid has rejected it. I mean factoring in a proper amount of money into your overall costs.
  • How much time do you have to work each day/week/month? Remember that nobody really works eight hours a day. Most people’s maximum is four or five chargeable hours. The rest is admin, meetings, marketing, toilet stops, breaks (please take toilet stops and breaks!).
  • Remember to factor in annual leave, weekends and holidays. Decide how much time off you want to have each year. I think you should factor in at least four weeks, which is what employees are entitled to in New Zealand. Your business should support your life, not the other way round.
  • Do you offer packages? What will you include in those packages?
  • Do you work by the project? What would typically be involved in a project?
  • What limits will you put on work done? How many rounds of revisions will you include? How many updates? Make sure every work activity you do is being charged for: don’t work for free!
  • How many clients can you energetically and joyfully serve each month? I’ve put that one in bold because it’s so important. There’s no point in cramming in work that you don’t have the capacity for, because you won’t put in the energy that makes it so valuable, so ‘you’.

One more important thing about pricing creative services

Your prices aren’t set in stone. This is your business, and you’ve got the right to play around with your pricing and tweak it until you’re happy with it (at least until you decide to give yourself a pay rise!)

Over the next 20 or so projects you quote, see what happens. If you get about half of them, your pricing is probably about right. Less than half and it’s likely to be too high. More than half, possibly too low. Raise them and see what happens.

I know in my copywriting days I’d sometimes whack an extra bit of money on the quote at the last minute (because I wasn’t that clear or confident about my prices) – and I was often pleasantly surprised when they were accepted, and pleased I hadn’t missed out on that extra $200 or whatever.

So there you go. A quick guide to pricing your creative services. My wish for you is that you can feel confident, comfortable, and above all not greedy about charging for the value that you add to your clients.

Because you definitely deserve to be fairly paid for your creative work.


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