Whether you are a painter developing a body of personal work or a graphic designer working on commercial projects, one of the most challenging aspects of building your business is figuring out how to price your time and final works. Determining how to value creative work is often an unclear equation with a complex set of variables like time, expertise, overhead, market demand and industry standards that are overwhelming even for seasoned creatives and freelance professionals.
Lorien Stern is an independent multimedia artist with works that include ceramics, screen printed clothing, pins, patches, and illustrations. The bulk of her operations—from sourcing materials to client interface and shipping—are all performed by Stern in her Mojave Desert studio. Tammi Heneveld is a Portland-based illustrator, comic artist, and graphic designer whose freelance work varies between digital, web design and print campaigns, as well as full-on re-brandings and identity projects. Artrepreneur chatted with Stern and Heneveld on understanding how to value creative work, how to structure your freelance rates and tips on protecting your time and work.
UNDERSTAND THAT YOUR CREATIVE WORK HAS VALUE
At the start of your career, it is easy to feel self-conscious about being behind more experienced peers. You may also be overwhelmed with ‘seller’s guilt’, a common problem for young creatives that feel guilty about charging money for an activity that feels more like fun than work. Subsequently, many young artists and creative freelancers across fields grossly undercharge for their time and services. Both Stern and Heneveld voiced hang-ups about feeling guilty and doubtful over the intrinsic value of their time and expertise and the constant fear of ‘over-charging’ during the initial stages of their careers.
“Initially, I was really self-conscious about pricing my work and setting competitive freelance rates. I had a really hard time believing that someone would want to spend more than ten or twenty dollars on one of my pieces,” explains Stern. “It took a lot of convincing from a lot of different people to understand that my time had value and that I needed to be charging money that represented a living wage. It’s still very abstract, but I am more mindful of my business and don’t feel guilty anymore about charging money for something I enjoy doing.”
Heneveld faced similar challenges at the onset of her career as a freelance graphic designer and often felt guilty about charging money for something that didn’t always feel like ‘a job’ and her own issues with the cross-section of art and commerce. She leaned on fellow graphic designers that were further along in their careers to gain confidence in her pricing structure and hourly designer rate. “I first had to understand that I had inherent value and a particular skill set and expertise that allowed me to solve problems for clients that they couldn’t solve on their own. That helped me understand that, although I was having fun doing it, I was still being hired to perform a job,” she explains. “It was also eye opening to hear from colleagues that when one graphic designer undercharges, it isn’t just affecting them, but it brings down the value of the industry as a whole.”
Figuring Out How to Price Your Freelance Rates
For an independent artist like Stern who doesn’t work with an agent or single gallery and rarely does commercially licensed work or commissioned pieces, attributing a monetary value to her work is a constant challenge. The difficulty in arriving at consistent freelance rates is compounded by the fact that she is a multimedia artist that works with ceramics, screen printed clothing, pins, patches, and illustrations that vary widely in size, skill, time and cost of materials.
Much of her pricing and freelance rates structure means responding to the influx of demand she sees across platforms, which include Etsy, Society6 and her personal Squarespace, and comparing that to the supply that she is able to stock as a single-person operation who deals with everything from sourcing materials to customer service and shipping.
“Since I began I have slowly increased my prices by simply feeling out the reactions I get and paying attention to how my following grows. I also pay a lot of attention to what sells well,” she explains, “When something starts selling immediately, I will look at how easily I can meet that demand. If I can’t produce enough to meet the demand, I’ll raise the price.” Her simplistic policy acts as a stress buffer, as well, allowing her to continue producing quality work at a lesser volume while still taking home the same profits.
For a graphic designer like Heneveld whose work is more service-based, figuring out how to value her time and set an hourly designer rate is a less arbitrary task. In addition to reaching out to colleagues and attending local designer meet-ups, Heneveld uses online resources to understand the current industry standards to value creative work, like designer Jessica Hische’s personal blog and website and AIGA, a members club for professional designers with more than seventy chapters around the country and an extensive online resource, such as a freelance day rate calculator.
“I lean a lot on my community and am always talking to colleagues. In Portland, fortunately, there are a lot of meet ups and you can go and talk to industry leaders one-on-one to get insight on everything. How to handle contracts, freelance rates, all the nitty gritty stuff that designers don’t naturally know how to deal with,” she explains, “I’ve found it helpful to talk to people from different areas as well. Photographers deal a lot with licensing, project managers are spending all day sorting through contracts and writing statements of work.”
PROTECTING THE VALUE OF YOUR TIME AND EXPERTISE
Like most artists, Stern began exclusively selling her work as the direct point of sale. This allowed her to maintain a lower price structure for customers. Although direct sales still make up the bulk of her sales, her previous prices had to be re-structured to meet the contractual obligations of the wholesale market and galleries, which take commissions of up to 50% of the total profit. Stern uses a simple equation and triples or quadruples the cost of materials and overhead costs like internet, sales platform subscriptions, and a part-time assistant, and heeds the advice of gallerists, shop owners and web platforms to arrive at a final sale price.
“It’s really important to be consistent with prices,” Stern emphasizes, “Obviously, I can’t sell my products for a less than what is sold in stores or galleries. For more commercial stuff, like t-shirts or pins, I calculate the price so that no matter how something is sold, I’m taking home a minimum of a fourth of the final sale. When I price individual pieces sold at a gallery show, I trust that gallerists understand their clients and the market and the value of an individual piece.”
For Heneveld, whose work as a graphic designer is more service-oriented with a wide scope of available deliverables, airtight statements of work are paramount to managing client expectations and protecting her time and budget from being compromised. All new projects begin with a one-on-one conversation to map out the size and scope of each individual deliverable, which is later translated to a detailed statement of work that outlines exactly what each party is responsible for and how she’s set her freelance rates.
“Absolutely everything has to be set in stone before I even begin actual work on a project. I want the client to know exactly what they can expect from me,” Heneveld emphasizes.
She stresses the importance of not only itemizing individual deliverables but also outlining in clear terms the scope of her work. With a project that involves physical deliverables, for example, she itemizes each one with their corresponding dimensions, quantities, and supplies, as well as specifying who will be responsible for interfacing with a printer and sourcing materials. Additionally, she will include her contractual responsibilities like number of rounds of revision, deadlines, and information about follow-up work or maintenance to avoid clients from ‘scope creeping.’ “If the scope of work is poorly communicated, then you get those clients that are constantly asking for ‘just one more thing’ that could end up adding months more to a project.”
For payment, Heneveld sets a flat rate for her services and outlines an hourly designer rate for any additional work. She prefers to set her freelance rates in this manner because her hourly designer rate for a project is often hard to track, difficult to communicate to clients and penalizes efficiency. To start a project, she takes a fee worth 50% of the final price and sets up a payment schedule with late fees to conclude the purchase. Kill fees are also included in contracts, so that “if a client decides they want to scrap the project for whatever reason, my time is still being compensated.”
FIGHTING FOR YOUR VALUE
Heneveld concludes that it’s important to not be fearful that assertiveness over your pricing and freelance rates could be viewed as a negative. “I was worried for a long time about coming off as demanding or domineering,” she says, and points out that clearer communication has lead to healthier business relationships with new and returning clients alike.
As creatives, it’s important to note that sticking to freelance rates that make you feel comfortable and valued is imperative. When it comes time to value creative work, remember that your expertise is extremely valuable, and your freelance rates should be set accordingly.