Theo Stephen Williams - The Graphic Designers Guide to Pricing, Estimating, and Budgeting

The
Graphic
Designers
Guide
to Pricing,
Estimating
& Budgeting

Revised Edition

By Theo Stephan Williams

2010 Theo Stephan Williams

All rights reserved. Copyright under Berne Copyright Convention, Universal Copyright Convention, and Pan-American Copyright Convention. No part of this book may be reproduced, stored in a retrieval system, or transmitted in any form, or by any means, electronic, mechanical, photocopying, recording, or otherwise, without prior permission of the publisher.

14 13 12 11 10 5 4 3 2 1

Published by Allworth Press
An imprint of Allworth Communications
10 East 23rd Street, New York, NY 10010

Cover design by Kristina Critchlow
Interior design by Kristina Critchlow

Page composition/typography by Integra Software Services, Pvt., Ltd., Pondicherry, India

ISBN: 978-1-58115-713-0
eBook ISBN: 978-1-58115-766-6

Library of Congress Cataloging-in-Publication Data:

Williams, Theo Stephan, 1960

The graphic designers guide to pricing, estimating & budgeting / by Theo Stephan Williams. Rev. ed.

p. cm.

Includes bibliographical references and index.
ISBN 978-1-58115-713-0 (pbk. : alk. paper)
1. Commercial artEconomic aspectsHandbooks, manuals, etc.
2. Commercial artPracticeHandbooks, manuals, etc.
I. Title.

NC1001.6.W55 2010

741.60688dc22 2010006875

Printed in Canada

Acknowledgments

This book is dedicated to my dad, whose spirited love for his own work and entrepreneurialismway before anybody ever knew what that meantpaved the way to my own independence.

My mothers endless supply of hugs and her constant reminder to me as a young girl that I could do anything I put to mind are two of my greatest rewards.

Thanks to Tad Crawford, who believed in the first edition of this book enough to ask me to revise and republish it with Allworth Press.

Special thanks to Anne Hellman, who helped convert a run-on file of the original manuscript into a great working document. The entire Allworth Press staff is to be commended for their ongoing professionalism, creativity, and perseverancethanks everyone!

About the Author

Theo Stephan Williams is the founder of Real Art Design Group, Inc. Real Art is celebrating over sixteen successful years as a full-service graphic design firm with an international client base, including Universal Studios Hollywood, The Walt Disney Company, NCR, and the Mead Corporation, to name a few.

Theo has written three books for the creative industry. This current edition of The Graphic Designers Guide to Pricing, Estimating & Budgeting is a revised and updated version by Allworth Press after countless requests and e-mails to Theo when the first edition went out of print. Her other titles are The Streetwise Guide to Freelance Graphic Design and Illustration (second printing, 1999) and Creative Utopia (winter, 2002). Theo taught various graphic design courses at both the University of Dayton and Sinclair Community College in Dayton, Ohio, for over seven years before opening a West Coast office for Real Art in 1997. She spoke at the HOW Design Conference in both 1998 and 1999, sharing an insiders perspective on various pricing techniques as well as communication challenges in the creative industry.

Real Art has won hundreds of graphic design and advertising awards from almost every known award-giving organization and has had multiple appearances in Print and How magazines.

Theo and her husband Joel own an organic olive ranch in Santa Barbara County. Together, they founded Global Gardens in 1998 and globalgardensgifts.com in 2000, developing products from things grown on their ranch. They also import unique specialty food products under the Global Gardens name. A generous portion of their profits goes to benefit literacy programs in the United States, as well as general education in third-world countries.

Chapter 1

Why Me?

Y oure probably wondering why you picked up this damn book in the first place. Pricing, estimating, budgeting, and everything involving those three things in our industry are more than a royal pain, and everyone knows it.

Youve had the highs of that corporate client who had to get it done and never balked once at your pricing. You didnt even give him an estimate. He begged you to give it to him over the phone. The day of your presentation, he got so excited, he called some of his colleagues in to show off your ideas. You even got paid two weeks after you submitted your invoice. Now, this is what a graphic designer lives like! Wrong.

Sure, it might happen every once in awhile. But realistically, this isnt going to be the norm, even if you are one of those design firm names seen in every awards annual, industry magazine, and big design show. Even the big guys have to get down to basicspricing, estimating, and budgeting.

When I started out on my own in 1983, I truly expected the worst. I sold my beautiful car so as not to have a car payment. I paid off all of my charge accounts before I quit my job in anticipation of not being able to pay monthly minimum payments. I even went so far as to lie to my parents, telling them I got laid off, so they would feel sorry for me and lend me money if I couldnt scrape up enough work to feed myself. I moved a twin bed into my bedroom to allow room for a desk, drafting table (prehistoric, pre-computer days!), and suppliesmoving to a two-bedroom apartment would have been too expensive.

Well, doomsday never arrived. In fact, business was so good that after two short months of paying tow bills from my new used cars traumatic breakdowns, I bought a new car. My zero-balance credit cards were once again self-activated, to the delight of my wardrobe. Exactly one year after breaking free from the entanglements of the corporate ball-and-chain, I bought my own home and created a nice studio space to welcome clients and vendors. And I did it all with profit. You can profit, too, by establishing guidelines and simple disciplines for yourself that will soon begin ticking like clockwork!

Profityouve got to have it to survive. Sure, you can get by for awhile breaking even on jobs. But it wont be long before you burn out, shrivel up, and change careers. Graphic design can and should be a very lucrative industry. Just how profitable you are goes back to basics: What are your rates? Are your estimates comprehensive yet concise? Do you have an efficient method of project management? This book will help you answer these questions and will give you many ways to accomplish the feat of profitability.

Profiting from your graphic design business is essential, not only for you but also for the entire industry. There are two reasons a business fails:(1) You dont have enough sales, or (2) you are not profitablemeaning, youre either not charging enough for your services or youre mismanaging budgets. You are doing not only yourself, but also your colleagues across the nation a great disservice by not charging your clients enough money for your work to be profitable. If you remember nothing but one thing from reading this book, remember this: Profitability is the main focal point of any project you accept and a reason you might decline what seems like the perfect project. Know where you are, bottom line, before making any decisions. If it sounds hardcore, it is; but if you keep going back to that mantra of profitability you will find the rest of this book easy to implement and admirable success your virtue.

Why you? Because you love being a graphic designer, you want to be successful, and you know that to achieve the ultimate successes of it all, youve got to be a savvy businessperson. And if youre not the master of the issues detailed in this book, you can forget any business dreams in graphic design... I hear theres a burger joint down the street looking for a few good flippers!