[MrsLarry]

I'm designing two logos for a (very small) start-up financial services firm. My Designer's Guild Handbook says $4 to $10,000. Or a fee up front with a second payment to be made after the business gets on it's feet in a year.

That seems outrageous to me!

What do you think is a good pricing option?

[Oisín]

I’d consider the second option quite good, really. Perhaps a fairly small fee up front (perhaps $1,000 or so, depending on the complexity and time-consumingness of the task—a fee that’s just big enough you’d consider it acceptable as full payment, if worst came to worst), and then a second fee to be paid in a year’s time, when it’s become clearer how the firm will fare, perhaps laid out as a percentage of the firm’s net earnings that month. That would earn you a bigger fee if the firm ends up very prosperous and quick-growing, and would still keep you away from charging mom-and-pop firms preposterous fees. Of course, if they go belly-up within the first year, you’re left with just the ‘retainer’, which is why the first fee shouldn’t be too low, either.

[Thorzdad]

Pricing can be very, very dependent on many factors that have nothing to do with the actual work involved. What is the size of the company you are doing the work for? What's your local market like? How established are you (i.e. Do you have a steady stable of clients and are a known name in the community or are you just getting started?) Have you ever done a logo design? Etc.

Generally, I've found the Designer's Guild handbook to be a usable, very general guide to practices. But, for the most part, it doesn't come close to addressing the needs of so many practicing designers in small markets. It's very much geared toward the idealized image of graphic design. But, as I said, it's good for the basics.

For one thing, at the level you're talking about, ignore the whole "corporate logo design with an eye toward establishing market presence and growth through an expanded consumer identity program" thing. That's where that $10,000 range comes in. This sounds more like you're just doing a couple of logos for a small local business. Period. They want something to put on their business cards.

Do you have a general idea of what you need to charge per-hour to make ends meet? Have you ever done a commercial logo and, if so, how much time did you put into it?

The good part about your description of this job is that the client is a financial services company. Clients like that seem to have a better understanding/respect for the idea that professionals charge professional prices. As opposed to Tony's Muffler Shop, who has a cow if you quote over $50 for anything, including a logo.

Would you be comfortable quoting the client $250 per logo, plus whatever your hourly rate might be for any work beyond the first revision? Of, if the two logos are variations on a single theme (thus, you'll be re-using the art) split the difference. Again, I'm not familiar with your market or situation in the market. You may have to adjust the pricing accordingly. Also, will you be doing the design for cards and letterhead? That should figure into your pricing, as well. Or, if they get bitchy about the price, throw-in the collateral design with the logo price.

Obviously, you can work the pricing many ways. It's really up to what you feel is fair to yourself in order to make your time worthwhile. Logo design is rapidly becoming a losing proposition when it comes to small business clients. They can get $50 logos online, or they can get a logo even cheaper from some school kid armed with a copy of Photoshop. That's what you're competing against much of the time today. Quality and service often take the hindmost to price. Try to sell yourself as a continuing service...business card, letterhead, sales brochures, newsletters, etc. Sell yourself as a partner in building their image and reputation. A continuing relationship with a local designer is more than just a quick logo.

[andi*pandi]

that's excellent advice up there.

What you charge for the logo isn't perhaps as important as building a relationship to bridge to the other work.

[MrsLarry]

I am by no mean an established name in my community. I have an LLC under which I do design work, typically un-related to corporate branding-type things, but my name has apparently made it to this new small business.

Typically, for straight design work I charge $75/hr. I can't imagine the logo would take very much time (crossed fingers) but The Guild book has a point, that it's about the value of the piece. They've indicated that they'll want to use the logo on collateral, letterheads, business cards, brochures, etc. (which they haven't asked me to design - so I don't know the future on that)

Both logos will be a similar theme, but different creative.

In my head, I've been tossing around $500 each, which would include 2 rounds of creative revisions. Then my hourly rate after that for any changes. But, the idea of an additional payment in a year if the company takes off intrigues me.

[Thorzdad]

Originally Posted by MrsLarry 

But, the idea of an additional payment in a year if the company takes off intrigues me.

I seriously doubt that would fly with a small business. It would unnecessarily complicate things. Keep this simple and emphasize the continuing service aspect of the relationship.

[MrsLarry]

[head down] Thanks, Dad.

Kidding. You're so right. I can't let the money cloud my judgement.

[pra9ab0y]

I just charge per job and then add on revisions at the end.

My hourly rate that I will not budge it £50. For mates I normally do it free as long as they buy me a beer or chuck something my way that I can use!

Say my client wanted a business card. I would charge £250 for 5 different ideas. I would spend about 2/3 hours on the project to begin with. Then I would send them the 5 ideas. and give them 1 round of amends included in my first price. After that each set of changes I charge per the hour. Even if its a quick 20 minute change I still charge the full hour as the time you spend doing the change checking things and mailing back normally is pretty close to the hour figure.

I recently helped a friend out who was doing design for a small decorating/building firm. He wanted a logo, stationary (letterheads, business cards and comp slips), van decals, a boards and a website.

I got her to charge him £1000 for the logo and the stationary. Then we added on £600 for the rest of the design. And for the website we charged £100 per page plus £50 for any extras such as photo galleries, forms etc...

All in all we got about £3000. He was happy with what we provided him and has even come back for more design.

- You need to be solid with your prices. You should get a figure in your head that you want to charge either per hour or per job. And then mark it up a bit. The client will always try and get you to come down in price. Marking it up above what you want, normally lets you get the job and be happy with the price. whereas if you didn't mark it up and they wanted money off you would effectively be working for less than you want.

I hope I have helped. It took me ages to decide what i wanted to charge but don't be scared! Don't undersell yourself and you should end up with more of the jobs you want and less of those that are going to be a problem.

[Doc HM]

My golden rule when dealing with small firms is Anyone who says they want the first project free/cheap because there will be more work later is lying. Such people don't value your time/work now and won't magically do so later. Be confident with your pricing up front. If your work is good and the price fair (to you both) they'll be back later.

[art_director]

Originally Posted by Doc HM 

My golden rule when dealing with small firms is Anyone who says they want the first project free/cheap because there will be more work later is lying. Such people don't value your time/work now and won't magically do so later. Be confident with your pricing up front. If your work is good and the price fair (to you both) they'll be back later.

This post gets a hearty 'AMEN' from moi.

[art_director]

There's a lot of smart advice in this thread. Too much to call out all the great points. Young people should take this advice very seriously.

RE: Compensation for logos -- I keep my prices high for logos. Two reasons:

1. I take it very seriously and work darn hard at it. I employ my experience and unique perspective. It always shows in the end product.

2. Been in the biz too long to have patience for clients who don't get it. If I keep my rates high I get better clients and a better end product. Not to mention more money.

A client recently contacted me about doing a logo. They offered me roughly half my usual rate. I was willing to drop my price to help out my client and because the logo was for an international non-profit. (Yeah, I'm touchy-feely guy, I admit it.) Then they asked if I wanted to see the 20-30 logos the designer they just fired had presented over the course of several weeks. Recognizing the warning sign lurking behind that revelation I walked away. A bummer given that I love the non-profit. But my sanity is worth more than helping save the world.

[art_director]

Originally Posted by MrsLarry 

But, the idea of an additional payment in a year if the company takes off intrigues me.

If you were to do this, and we checked back with you in 366 days, you most likely wouldn't have made a penny over the initial compensation regardless of what the client told you. Clients quickly forget what we do for them. IOW, always bill quickly. You want them signing checks before the champagne high of a spiffy new logo wears off.

[Veltliner]

Originally Posted by Doc HM 

My golden rule when dealing with small firms is Anyone who says they want the first project free/cheap because there will be more work later is lying. Such people don't value your time/work now and won't magically do so later. Be confident with your pricing up front. If your work is good and the price fair (to you both) they'll be back later.

Photographers deal with similar things, and this is good advice for any independent, creative professional.

[Veltliner]

Originally Posted by art_director 

There's a lot of smart advice in this thread. Too much to call out all the great points. Young people should take this advice very seriously.

RE: Compensation for logos -- I keep my prices high for logos. Two reasons:

1. I take it very seriously and work darn hard at it. I employ my experience and unique perspective. It always shows in the end product.

2. Been in the biz too long to have patience for clients who don't get it. If I keep my rates high I get better clients and a better end product. Not to mention more money.

A client recently contacted me about doing a logo. They offered me roughly half my usual rate. I was willing to drop my price to help out my client and because the logo was for an international non-profit. (Yeah, I'm touchy-feely guy, I admit it.) Then they asked if I wanted to see the 20-30 logos the designer they just fired had presented over the course of several weeks. Recognizing the warning sign lurking behind that revelation I walked away. A bummer given that I love the non-profit. But my sanity is worth more than helping save the world.

You sound quite established. Building up a business in this bad market incredibly difficult.

But it looks like that good quality and a realistic price only drives away the cheapskates - which is good.

The thing for someone just starting up: you can't be as good as the established people, as you lack experience. So you have to work for less. This gets you immediately into the not-so-good client range. But this can't be helped. I think one has to start up with any client you can get, and then develop the luxury of not accepting tough stuff.

Your non-profit logo thing would be a god-sent for any newer designer (I guess) - which is why they never get those offers. Those people try to get a super low price out of established people first.

[Veltliner]

Photography is hard hit by this economy, more than most other businesses.

I notice that I get two kinds of clients. 1. Those who would have paid a higher price anyway because they like my work. 2. Those who I'd have lost with a higher price.

You never know beforehand which is which.