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How to Price Your Creative Services

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HOW TO PRICE YOUR CREATIVE SERVICES

I know most creative-focused blogs tell you that you aren’t charging enough. That may be true, but more often than not I see people charging too much based on their level of experience. There’s no shame in taking some lower paying projects to build your portfolio. Once you're able to better judge where you land, you can adjust your prices.

There’s other things to consider too. Are you creatively amazing with tons of experience but lacking in customer service? Well, hate to break it to you, but that isn’t going to bring high paying clients. You have to focus on the non-creative parts of the job too. Customer service is king in the creative services industry. If you can provide an amazing experience for your client, they are much more willing to compensate you for it (and tip you). The hardest part is proving that before they even contact you.

REVIEWS

This is where reviews come in really handy. Start compiling reviews as soon as you can, even if it’s just in a word document at first. Finishing a project with something like; “If you have any feedback about your experience working with me I would love to know!” can prompt a review-type response when you don’t have a review system in place. Don’t have any projects with reviews yet? Ask those around you! Using snippets from a letter of recommendation can work really well in place of a review when you’re first starting out.

I need to do a better job of asking for, recording, and listing reviews. However, my time on Fiverr has given me over 120 five star reviews. Not to mention, my non-Fiverr client reviews. I will definitely be looking for a better way to add those to my website in the future. That way, prospective clients can get a good idea of if I would be a good partner to work with before they even inquire.

PORTFOLIO

You need to be comfortable with and confident in what you’re charging for your services. A portfolio is a great way to instill that confidence in yourself and your potential client.

When I graduated from University I immediately began searching for jobs in my area. After my first interview I realized that all of us had practically the same portfolio because, well, we all followed the same curriculum. I knew I had to do something to set myself apart. That is initially why I decided to start on Fiverr. The other method I used to build my portfolio was to create individual projects for each company that I was interviewing with. After 10 interviews and about 3 months on Fiverr, I had quite an extensive portfolio to work with! Once I built my physical portfolio, I finally had the confidence to charge higher prices for my services and I landed my dream job.

You can read more about creating a digital or physical design portfolio that will land you clients in this post.

PRICING YOUR SERVICES

Alright, let’s talk money!

{ But first a quick aside: If you didn’t know, I actually graduated from University with two degrees, one in Apparel Design and the other in Accounting. Shocking I know! So please forgive me for geeking out over numbers and if any of this is confusing definitely comment with questions. Oh by the way, my fiancé is a Tax Manager so this type of topic is a nightly discussion! ***SPOILER*** I’m hoping to have him guest post in the near future about small business taxes for ya’ll! }

Be honest with yourself about your skill level and charge accordingly. It’s totally fine to start small and work your way up. In fact, when I was starting, I charged only $5 for a sketch. Even though it took me an hour or more to create a single sketch, I was more interested in landing jobs, gaining experience, and building my skillset and portfolio. So, in retrospect my ROI (return on investment) was actually much higher than $5. I was being paid (very little, but paid nonetheless) to create a portfolio that would land me a high paying job in the future.

Research what others in the industry are charging, but take it with a grain of salt. Be aware that everyone charges a certain price for a certain reason. They may be trying to figure it out just like you! Maybe they are just realizing that they are charging far too little for their services. Or far too much!

I do not charge an hourly rate for any of my services, except consultations. This is because I couldn’t possibly quantify the years of education, training, and research that has gone into my expertise to an hourly rate. It’s about charging for your worth, not your time. Regardless of how quickly or slowly I finish a project, I charge the same amount.

Now that I’ve worked on thousands of projects with hundreds of different clients, I have a pretty good idea of how long a project will take me. Be patient and adjust your prices as necessary as you gain more experience.

I do however, use an hourly rate estimation to create base prices for my services. You can use a basic formula to do the same. This is a great way to get a basic understanding of what you should be charging roughly, then you can adjust from there.

There’s 2 methods. If you like working off an hourly rate, try method 1. If you like working off a target income goal, try method 2.

1. WORKING FORWARDS

Expenses + (Hourly Rate x Average # of Hours Per Project) + Profit Margin = Average Cost of Service

ex:

Let’s say you have $15,000 of expenses in a year. If you divide that evenly among the number of jobs you expect to have over the year, let’s say 40, your expenses would be $375 per project. On average a project takes you roughly 3 hours to complete and your hourly rate is $50 an hour. You want to make a profit margin of 40% per project.

$375 + $150 + $210 = $735 is the average cost of your service

You can then allocate that amount between lower, middle, and high tier services. So you could have a $200 service that takes you an hour, a $500 service that takes you 2 hours, and a $2,000 service that takes you 10 hours to achieve roughly the same goal.

You can then use your average cost per service to estimate your profit for the year.

$735 x 40 jobs = $29,400

2. WORKING BACKWARDS

Revenue Goal - Expenses = Profit

Profit / # of Estimated Jobs = Average Cost of Service

ex:

Let’s say your goal for total revenue for the year is $44,400 and again, your expenses are $15,000. So, your profit will be $29,400. Again, let’s assume you’re going to have roughly 40 jobs in a year.

$29,400 / 40 = $735 is the average cost of your service

You can then allocate that amount between lower, middle, and high tier services. So you could have a $200 service that takes you an hour, a $500 service that takes you 2 hours, and a $2,000 service that takes you 10 hours to achieve roughly the same goal.

TAKE YOUR EXPENSES INTO ACCOUNT

What are the expenses you incur to be able to provide services to your clients? Try to estimate all of them to include them in your calculation. Do you have an Adobe subscription? A computer? What about a website or a CRM? What’s your overhead (rent, electricity, internet, etc.)? Do you own your own business and need to pay taxes and license fees? Be sure to take all of these things into account so that you can allocate them across your expected number of jobs.

MAKE A PROFIT GOAL

This can be especially hard when you first start out! Be realistic, but don’t be afraid to push yourself either. My first year full time self employed, my goal was to make the same total revenue as the year before at my 9-5. I focused on total revenue instead of profit because I wasn’t sure what all of my expenses would be.


I am still not charging what I need to be profitable. I am still testing my market and making changes to what I provide and what I charge, and I’m almost 5 years in! I can’t stress this enough, be patient. Never blame your client or resent them because you didn’t charge enough. Take it as a lesson and adjust for the next project. You should definitely be increasing your prices every year (at minimum). Some creatives even choose to increase prices twice a year.

Finding the perfect price sweet spot is hard and definitely takes a lot of time and adjustment. It’s not always fun, but the beauty of it is that you’re in control of your business and you get to make the decisions. Don’t take it too seriously!

I hope this small guide was helpful for you! Let me know in the comments what some of your favorite methods are for estimating your services prices.

Natalie SmithComment