As we discussed in the previous article about two methods of pricing, hourly and fixed, in both of these methods you need to calculate your actual cost involved for your living, after all prices cannot be set in a vacuum. First you should calculate your hourly rate by adding all of your monthly expenses for example:
Your List of Monthly Expenses
- Utility Bills
- All Fees
- Your Meal Expenses
- Traveling Expenses
- Your Entertainment Expenses
Add them and divide with 22 (working days of month) it will give you the cost of your each single day in a month.
Let say your expenses are:
Utility Bills = Rs. 10,000
Any Subscriptions or stock art purchasing = Rs. 5000
Your monthly meal expenses = Rs. 20000
Traveling Expenses = Rs.10,000
Entertainment Expenses = 10,000
The sum of all will be Rs. 55,000 Now divide 55000 with 22 (working days of month), so the calculation will be 55000/22 = 2500, an your each day living cost is Rs.2500. Now divide 2500 with 8 (or Hours you work in a day) and that will be, in this example, amount of Rs. 312.5 or say Rs. 313, to make it round, it should be your minimum hourly rate. It mean you need at least Rs. 313 per hour, 8 hours a day, 5 day a week to maintain your living. It depends totally upon yourself that how much you would like to earn or work each month. You can increase the figure proportionally by keeping in mind your market prices, as well as, your expenses per month. Obviously you would not charge clients at rate of Rs. 313 for only 5 hours work, so here you will increase the price of your per hour proportionally to the market price and the projects you want to do in a month.
Now come to the fixed rate projects. For example, as per our previous calculations, you can do only single project worth of Rs. 55000 to sustain your monthly living or you can do two projects of Rs. 25000 each in a month, so you will bill each client Rs. 25000 for each logo if he is willing to pay and only two projects will be enough to cover all your monthly expenses. In this formula there is always involved a market price factor. Let say you do each logo design project in Rs. 5000, which is, for example in your area, is a normal logo price that other designers charging to their clients then you may be unable to charge more than Rs. 5000 for each logo to your client. It means you will do at least eleven logo design projects to live comfortably. You can always charge more than normal price to the client, but, for that you should have a very solid reason or your own brand must be strong enough so that client pay you more than other designers happily. You should also keep an eye on the market prices which other designers are normally charging as well as your monthly expenses.
I hope this simple calculation will help you a lot for not only how you should price your work but also how many projects, as a creative human being, you need in a month.
I personally suggest you to do read the book I mentioned below, it will not only give you the idea about pricing your work as a creative artist or graphic designer, but also will tell you lot more about the business skills you should have being a creative.