Out of every design-related article and blog entry written over the past few years, very few have tackled the “taboo” topic of money — namely how much to charge for creative work. There are thousands of articles about CSS best practices but when it comes down to paying bills or putting food on the table, work-for-hire designers are on their own.

What They Are Really Paying For

Pricing design work isn’t the same as deciding how much a plastic scrubber costs at Wal-Mart, you don’t factor in the same variables. Each design project is a one-off thing, a “custom ordered” piece of capitalism that cannot be priced as a commodity. A plastic scrubber might make the manufacturer money if it’s sold for $3.99, but that’s not how much it cost to produce if you look at all factors. If you add up the research and development costs associated with creating the scrubber, plus the scientists’ salaries for perfecting that particular type of plastic, along with the pay for the sales and marketing teams that managed to make you think you need that scrubber, those costs add up to a whole lot and that’s similar to a design project.

When you hire a designer to do a one-off, custom piece of Internet-deployed creative work you’re not paying for the X hours it takes in Photoshop to create your logo (or maybe you are, we’ll talk about that later) what you’re doing is paying for the years of experience it took to know what to do in those X hours to create pixel magic. My friend James Archer uses that analogy when justifying how doctors can charge so much, and I think it works for designers too.

When you hire a designer to rework your logo or user interface, they’re adding lots of value to your company and brand. You may only pay them $1,000 for the logo but if it provides your brand with increased recognition (which leads to more customers, more paying accounts, better reputation, etc.) then the ROI from the company’s point of view could be 10x that, or 1000x. Keep that in mind next time a client starts haggling over a quote, since they could probably make up the expense in just a few weeks time.

Pricing My Creative Work

I have no hard rules for what I quote clients — it all depends on the site, the audience, the features, their budget, if I know them, etc. — but I do have some general guidelines.

• Each new template (or page) design is about $800.
• A derivative template (or page) is about $500.
• Converting design to XHTML/CSS is $100/hr.
• Integration into Movable Type or Wordpress is another $100/hr.

These are the basic pricing guidelines that I started my career as a work-for-hire designer with, and I still use them as a reference (not a rule) for estimating new projects. Here’s how they work

New Template Price
This refers to a Photoshop mockup of a totally new design, ex. the homepage for a blog or website. For blogs I normally have one or two of these templates as part of my pricing equation, one for the homepage and the other for the individual entry page with comments if that’s going to be totally different. Each has its own design characteristics and is unique, so I qualify them as 2 unique designs. The $800 price is based on how long it normally takes me from beginning to end in Photoshop to create the design, with the goal of hitting about $80/hr as an average. Sometimes I’ll spend 2 hours and get the design nailed, sometimes it’ll take 20 hours spread out over multiple design iterations, so the $800 covers the edge case scenarios.

Auxiliary Template Price
It’s lower than the brand new template price because it’s a derivative of the other, based loosely on the other design. In a blog, this could be a category page design, or an about/contact page. Again, sometimes this secondary template is easy and sometimes it “costs me money” by taking a lot of time and pushing my calculated hourly rate down, but you have to roll with the punches.

Coding Rates
This is my catch-all for adjusting the project estimate based on the technical difficulty. I don’t like to inflate my per-template costs based on the perceived difficulty of the design, instead of I just have more hours of XHTML/CSS and integration ahead of me. Generally it only takes me about 3-4 hours to pull together the XHTML/CSS for a blog but a tricky layout could take 3x that.

Doing The Math

A potential client comes to me and wants to redesign their blog (I do more blog designs than anything else and like it that way!). Here’s a typical quote calculation:

$800 + $500 + 4($100/hr) + 4($100/hr) = $2,100

That estimate is for a main template (the homepage), plus an auxiliary template (archives), with about 4 hours of XHTML/CSS coding (an average-difficulty design for me) and another 4 hours of either Movable Type or WP integration.

Now say I’m working on a slightly more involved blog design, one with a totally custom comments section and a separate archives area with its own design. Maybe there are some involved features in the sidebar, or the footer looks like the one at Business Logs. Here’s a hypothetical estimate calculation for a more involved website:

2($800) + $500 + 10($100/hr) + 6($100/hr) = $3,700

The site has 2 major templates (homepage and individual entry) plus a custom archives page, with a lot of XHTML/CSS coding because of the difficulty, and some advanced integration.

Of Course It’s Never That Simple

If design project estimates were just the napkin addition of some hard-and-fast numbers then my life would be a lot easier, but it’s not like that. Here’s an incomplete list of things that might throw my figures out the window:

• If they’re a previous client of mine, I always give them discounts.
• If I’m just doing the design, no coding. Obviously that’s a lot cheaper.
• If they have a specific budget, maybe we can work out a deal.
• If the project is really, really cool, I might take my estimate down a bit just so I can get going on the job faster.

When figuring out estimates I have some general guidelines I work with but there are also some variables (mentioned above) that can decrease or increase the estimate. Just like design isn’t a science, neither is creative work pricing.

Wait, I Charge By The Hour

Up till now I’ve been talking about quotes on a project-level basis, where there’s one figure for a narrowly-defined project with specific start and end points. I like to quote on a project basis instead of by hour for various reasons:

• If I spend 2 hours in Photoshop executing what I thought about for 4 hours while I was out playing golf, what do I do?
• If I spend 2 hours in Photoshop designing a web application’s user interface that goes on to be the deciding factor in them being acquired by Google, what do I do?
• If I don’t spend a solid block of time on a project (checking email, IMing, checking blogs, all at the same time), what do I do?

These are some of the reasons why I don’t quote by the hour. For me, the most important one is the concept that I’m only charging for my work, not for the value that my work adds to the company. If I design the layout for a startup and they win lots of awards for it, bringing them lots of attention and a $10 million buyout, what exactly was my time worth? Was it worth the few hours I spent in Photoshop or is it worth part of that 8 figure check? The problem with charging only by the hour is that a designer’s work is worth more than the hour they spend working on it. I like to think of my project estimates as a percentage of the value I think I’m adding to the company. If I’m redesigning the logo for a hot new startup I think that’s worth more than a new logo for a wireless phone blog, so I’ll quote it accordingly.

Hourly pricing does have its place though, and that’s with things that aren’t that “creative”. Writing PHP to make a web application tie into the database should probably be quoted by the hour (because more hours denotes more complexity), counting the hours it takes to get a blog integrated into Wordpress is another hourly project, and so on. My rule of thumb is if somebody else could do a specific part of the project without me or the client seeing the difference, then it could probably be quoted on an hourly basis. If somebody pays me for a “Rundle-like” design but I hand it off to a newbie designer in middle school, somebody’s going to be upset. If I hand the XHTML/CSS off to someone else and it functions exactly how it’d function if I wrote the CSS, then everything works out great.

In The End, It’s What Works Best For You And Your Clients

Nobody can tell someone else what they should be charging for their own work because it’s such a personal thing, tied directly into their own experiences and values. My pricing criteria has evolved over years of client work — figuring out what works, what doesn’t, when to raise or lower prices, how to read projects and clients, etc. In the end, what you tell someone else to pay you is really what you think your work is worth, and nobody can honestly tell you that the number you send out is right or wrong.