How to Price Creative Work
Money is awkward. No one likes to talk about it, especially if you’re a creative or an artist; it can leave a bad taste in your mouth when you’re forced to quantify your creative prowess and cheapen what you’re offering down to a simple exchange of services for money. I’m sorry to say it but creative work, distilled to its lowest point, is just this very thing, and as much as it may feel awkward to talk about, you need to be paid properly for the work you — the artist, the maker, the creative, the designer — do. Your business cannot survive without it.
There are two things to consider when looking at fees: what you need to charge and what you should charge. When first starting your creative business, it is crucial is to work out what you must charge to ensure that you’re not losing money on your projects and to ensure your costs and overheads are covered. What may feel like a large amount of money can end up being spread out over many months and results in actually very little cash for the business. And, let’s all remember that unforgettable adage: Cash is King (or Queen). In an ideal scenario, you will understand your staff costs (including what you cost your business) and your company overheads to ensure the fees your charging cover those, plus allow some fat (hopefully 20–30%) in the fee for profit. When you’re starting, it makes prudent sense to price yourself this way as you’re currently working towards building your profile and portfolio and to charge egregiously before this can be a disservice to one’s reputation.
However, I want to strongly advocate to avoid under-pricing yourself. It drives fees down for everyone else in your market, devalues what your product or service is bringing to the client, and in terms of the business, it ties a hand behind your back even before you start to work. It’s nigh on impossible to cover one’s costs if a fee is priced too low. Please don’t do it. Cash is the grease in the engine of your business, so it’s crucial to know what your bottom lines are in terms of the costs of a project to your business.
Once you’ve become more established, you can start to ask yourself what you should be paid and this is simply a flinch pricing test on your clients. You can only increase your fees incrementally and over time as the demand for your work and originality increases. Once a fee has been agreed, it can now be assumed that’s what someone will pay for your work as a baseline.
You know your costs, you know your overheads, but you also know and highly regard the value you bring to your clients. Once you — the artist, the maker, the creative, the designer — understands this value, along with your creativity and your originality, there is a level of self-regard and pride in the service or product delivered. The servant-master relationship starts to lessen. It is a collaboration of equals.
By Lindsay Faller, Founder
Cloudfields is a business consulting agency for creative entrepreneurs — see more at www.cloudfields.cc
