The Ultimate Guide to Pricing as a Creative

“What should I charge?”

It’s the age old question that every business owner wrestles with from time to time. Whether it’s creating a proposal larger than a previous scope you’ve completed or making sure you’re booking profitable jobs, the pricing conversation as a creative always feels like a strange one. How do you approach pricing yourself accurately and increasing profitability within your business?

Keep reading for the full guide!

Confidence + skill set + years of experience = your price point.

While many will advise you to base a price point off of your expenses, how many hours you want to work, and the level of business you’re working with (major brand vs. small business), I believe in a different formula. First, start with your skillset and years of expertise you bring to the table. What limiting beliefs do you have surrounding money? Is your skillset to the level of your competition within the market? Where is a starting line to build your business and what does scaling look like?

If there’s a rush, there is a rush fee. NO QUESTIONS ASKED.

While this doesn’t apply to every creative field, fast turnaround times, lack of boundaries, and the need for immediate gratification are synonymous with creative requests. I’ve heard potential customers try to reduce the price of their service and force a rushed timeline without additional compensation. It happens often and raises immediate red flags. If you have current availability, make sure you are compensated for a rush fee on a project. There should be compensation for overtime, working nights and weekends. (Remember this is standard for your mechanic and your dentist. It should be standard for you as well.)

Charge for the transformation and value you bring the table.

More than a service, your price point is determined by the transformation you bring to your clients. Most likely your work will do increase their ROI, make their business better, and improve their lives. This should be reflected in your pricing. With our work we offer branding foundations and website packages where clients are typically set up to take things from there. We have to charge accordingly as many of our projects are one-off projects. Remember, you offer more than a service. Your service improves someone’s life and brand for the better. You provide an amazing experience that serves their business for years to come.

Is it time to raise your rates?

If you’re feeling booked out, overwhelmed, or have to build a team, it’s time to increase your rates. Raising your pricing can feel scary, particularly if you are in an oversaturated or unstable market. With the current rate of inflation, you will need to increase your pricing by 10% annually simply to keep up with the cost of living.

Here are a few tips we recommend when it comes to raising your rates:

Host a “rates increasing sale.”
If you’re concerned about sales slowing down based on increased rate, make sure to let people know that you are about ready to increase your rates. For any potential customers that are on-the-fence or have been dragging their feet, this is the perfect opportunity for them to purchase your product or service to lock in your current pricing.
Increase your rate based on size of company (major brand, amount of annual revenue, size of scope, etc.)
It’s no secret that a major brand is going to have more capitol to invest than a mom and pop shop. We’ve also discovered that doing a rebrand for someone is just as time intensive doing creative and challenging than building a brand from the ground up. Have a varying pay scale for your services with private upsells and downsells throughout your offer suite.
Increase your rates by 5-10% with every 3 proposals.
While this sounds like a stretch now, if you are receiving inquiries from various industries and individuals who don’t know one another this is a no-brainer. Remember small price increases of 5-10% won’t make a potential customer walk away. Getting into this practice will make you comfortable increasing your price points incrementally.

Don’t offer discounts or work for exposure.

I know this one seems obvious but is something I see all too often when you’re hungry and in the early stages of the your business. That being said, don’t offer discounts to friends or family or agree to work for the name of exposure. Pro tip: if you’re launching a new offer and want to test it out, you can offer a steep discount in exchange for a testimonial. I only recommend this practice for building your portfolio and customer validation. Here’s what happens if a discount is offered all the time in the sales process: you cheapen the value both yourself and drive other creatives into the ground as well. No business is built by low balling offers.

Track your time.

Remember, if you offer flat rate packages and pricing, if we fail to track our time we are volunteering for someone else’s business. Don’t fall into this trap. When working as a solopreneur, you might not believe this is vital to increasing your revenue, however, knowing how efficient you are determines the profitability of a job. (Particularly as you scale to an agency environment with a larger team.) Time is your only non-renewable resource. Money comes and goes; however, time is fleeting. Whether you simply choose to time block out your day in a paper planner or to do list, or use a time tracking app a project management software like Asana, Trello, or Dubsado, incorporating this discipline, will inform the true hours (and numbers) spent on a project.

Know your numbers, projections, and hire a great accountant.

I can’t stress this point enough. Around week 3 of every month, we reevaluate. What does this mean? We plot out projections for project starts, incoming revenue, projects to wrap, what worked, and what didn’t work throughout the month. Take a hard look at the numbers, figuring out the places for investment, and the next steps for both sustainability AND scalability in our business.

The terms you need to know.

Value based pricing

As mentioned above, this is a pricing model based on the value you bring. This particularly works for larger companies, major brands, and mid to large size companies that already understand the value your company can bring. Within these proposals, include a fuller pitch within the bid truly selling the value propositions you can bring to their experience.

Package based pricing

Often used in creative fields such as photography, a package based model offers a service and what it includes for a flat rate. Within this pricing model, having clear and set boundaries to keep projects moving is vital. When offering packages, I encourage listing an hourly time tethered to the package. It will protect both yourself and offer the client a clear understanding of the time allocated to the project.

Hourly based pricing

Keeping proposals simpler in nature, an hourly based pricing model offers services for a price per hour. Within this pricing model, make a clear differentiation between what IS and IS NOT billable hours within the project and scope of work. Do you also bill for the admin, project management, and consulting surrounding the project? Within this pricing model, time tracking is vital. If you struggle to create under pressure or discipline, I wouldn’t recommend this pricing model for you as office hours are directly correlated to project production.

Retainer based pricing

Perfect for sustainable and consistent income, a retainer package offers a client ongoing services for a great value due to the ongoing nature of work. This pricing model is perfect for digital marketing, a company who would need ongoing design work, or social media management. As you’re working through the seasons of your business, identify clients who have the need for ongoing work. This will add sustainable income where there isn’t the constant need to onboard or off board clients, but rather offers sustainable and reliable income. When working with projects for long periods of time, find moments to creatively renew your energy on the project. When working with retainer clients, ongoing relationships are vital, communication is key, and clear cut expectations and boundaries are necessary.

The Getting Paid Rules (*aka learn from our mistakes)

These are no brainer default rules to help you get paid faster and see your profitability increase as well.

Want to avoid transaction fees? Force bank account payments/ACH on your invoices. This can save anywhere from 1.9-2.9% per invoice.
If a client doesn’t pay an invoice on time, apply a late fee as soon as a bill is 7 days late. (Depending on state law, make sure you are issuing email reminders periodically prior to applying a late fee and that this is outlined in your contract working agreement.)
Looking to get paid faster? Make invoices due as soon as services are rendered. (Goodbye net 15 and floating expenses on credit cards.)
Avoid scope creep on flat-rate projects. As soon as a project exceeds scope, issue a project fee addendum that requires invoice payment to continue. Do not wait to add this fee to a final invoice to get paid.
Be clear about how many hours of revisions are allocated within a flat project fee.
Shore up contracts. If you’re looking to sell your business in the future, you will need a book of clients and proven track record to sell. With any retainer services, make sure you are signing multiple months (3 month minimums) at a time. This allows you time to properly onboard clients, launch assets and see short-term ROI.

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