Los Angeles InDesign User Group
Pricing Graphic Design
Thursday, March 17, 2016
by Alvin Takamori
The Los Angeles InDesign User Group held its latest meeting on March 17, in the Garden Room, in the Veterans Memorial Building in Culver City. The check-in was unusually frantic because the Garden Room wasnÌt opened until 15 minutes before the start of the meeting. Thank-you to everyone for their patience and a special thanks to those who helped check people in.
As for the topic that night, it was something beyond just using Adobe InDesign. It was the broader topic of pricing graphic design. If you sell a physical product, you can add up material costs, manufacturing costs, labor time and overhead expenses, plus profit margin to calculate a price that you need to sell the product for. But how do you price a creative service like graphic design whose value seems so subjective?
To help answer this question, the guest speaker was Dan Wilson, the creative director at Roland DGA Corporation, a manufacturer of large format printers and milling machines, among other things. Dan started his presentation with a thought-provoking quote from P. Syrus in the 1st Century B.C."Something is worth what someone is willing to pay for it."
So what are some of the factors that you need to consider when deciding what something is worth? Dan provided a list and most of it is self-explanatory.
Next, Dan discussed calculating a target of how much money you want to earn to be profitable. Similar to a physical product you want to add your business expenses and your target business profit. Then you want to add your target salary to come up with the amount of required revenue your business needs to generate.
Another consideration is how many hours that you work and what percentage of that is billable hours. Maybe you spend half your time running the business. You are only spending half of your time working on clients projects that you can invoice for.
Dan recommended a website to help calibrate how much to charge per hour. It is hourlyrate.beewits.com. It has online forms where you enter all the relevant information to make this calculation. You enter information like how many hours you work in a day, how many billable hours you work in a week, how many vacation days you want, and all overhead expenses your business has: utilities, subscriptions, equipment, marketing, etc. You fill in the information and it tells you how much to charge per hour.
Next, Mr. Wilson broke down pricing approaches into five broad categories. The first was "Time and Materials Pricing." You keep track of how much time you spend on a project and how much you spend on materials and you are paid based on that. The second was "Retainer Pricing." If you have an established history with a client, you can make an arrangement to charge a fixed amount each month. The third approach is "Project Based Pricing." You calculate a fixed price to complete an entire project. If something unexpected happens during the project, you can modify the price with a change order. The fourth pricing method is "Value Based Pricing." Perhaps a project generates extra publicity for your business, you might consider offering the client a lower price in order to get the job. The final approach is "Preset Pricing." In this instance, the price is pre-determined based on the product. For example, you charge a fixed price for a vehicle wrap graphic.
All of the approaches have pros and cons, which Dan touched on. Ultimately, thereÌs no single solution to the question of pricing graphic design. However, using the information that Dan Wilson provided, you have some logical factors and approaches to finding your own solution.
At the conclusion of his presentation, Dan had everyone separate into small discussion groups to talk about their pricing issues. Then he briefly answered questions that arose from the discussions.
As usual, the meeting ended with a raffle. It seemed like there were more prizes available. But you had to be there and buy a raffle ticket to win.
Farthest Attendee Prize Winner
Mighty Deals—Rick Torres
Live Auction Prize Winner
InDesign 2.0, Photoshop 7.0, Illustrator 10, Acrobat 6.0—Annamaria DiSanto
Raffle Prize Winners
eDocker CREATE! 6 month subscription. Value $774.00—June Czerwinski
Adobe Creative Cloud. 12 month subscription. Value $599.88—Colleen Wainwright
Stock Layouts. Full access to Stock Layout template library. 3 month subscription. Value $299.00—Alan Gilbertson
AcademyX. Credit toward any class. Value $250.00—Annamaria DiSanto
Workbook Photography, Set of 4 books, Fall and Spring, 2014 and 2015. Value $200—BreAnn Mueller
Markzware. Any single product. 12 month subscription. Value $199.00—Rick Torres
Expo Creative Asset Manager for Mac from Insider Software. Value $149.00—Gay Swaine
Font Agent Pro 6 from Insider Software. Value $99.95—Thelma Andree
InMotion Hosting. Web hosting and free domain. Value $90.00—Jette Sorensen
DTP Tools Cloud for InDesign. 6 month subscription. $77.40—Wayne DeSelle
Fotolia. 3 month subscription. 5 images per month. Value $50.00—Wayne DeSelle
TypeDNA. Font management software. Value $49.00—Bob Cox
Creative Cloud Bluetooth speaker. $39.50—Angela De Leon
InDesign Magazine. 6 month subscription. Value $30.00—Rick Torres
Digital-Tutors. 1 month subscription. Value $29.00 (two raffles)—Susan Reuben, Vikki Salmela
LAIDUG 10th Anniversary USB drive, 8GB. Value $12.95 (ten raffles)—Rick Torres, Thelma Andree, BreAnn Mueller, Bob Cox, Rob Swaine, Alan Gilbertson, Chris Sullivan, Joanne Abensour, Dat Nguyen
NAESM ear buds. Value $10.95—Edward Goldstein
LA Web Professionals Group meeting tickets. Value $7.99 (four raffles)—Annamaria DiSanto, Laura Multon, BreAnn Mueller, Andy Tung
Moleskine Adobe MAX Edition Smart Stretch Album. Value 7.95—Param Sharma
Adobe User group gym bag. $7.75—Barbara Fier
Adobe Creative Cloud USB AC adapter, red. Value $5.95 (two raffles)—Wayne DeSelle, Vikki Salmela
Adobe Compact Journal, leatherette cover, red, 3.5x5.5. Value $4.00—Jette Sorensen
Kodak 360 VR Glasses for PixPro SP360 or Explore in 360 videos. Value $3.99—Thelma Andree
Adobe Creative Cloud mousepad. Value $2.25—Barbara Fier
InMotion bracelet. Value $1.99—Jette Sorensen
Slippers, disposable, white. Value $1.99—Wayne DeSelle
Gadget Grip DOT. Value $1.19 (four raffles)—Wayne DeSelle, Jette Sorensen, Joanne Abensour