Pricing Strategies For Your Graphic Design Business.One of the hardest things to figure out when starting your graphic design business is what pricing strategies to use. There are so many options to consider; your location, your skill level, your reputation, your competition and many more. Hopefully, after today's episode of Resourceful Designer, you'll have a better understanding of the various pricing strategies you can use to run your business.
Here are the 5 Pricing Strategies Discussed
1) Hourly Rate Pricing
Hourly Rate Pricing is the easiest pricing strategy to implement. You simply determine your rate and then charge it to your client for each hour or part thereof spent on their job.
2) Cost Plus Pricing
Cost Plus Pricing isn't as popular in the graphic design industry as it is in others but it does prove useful if you're also acting as a broker for printing or other services. In Cost Plus Pricing you determine the full cost of a job and then mark up that cost by a certain dollar amount or percentage in order to make a profit.
3) Competitor Bases Pricing
Competitor Based Pricing is great for new and inexperienced graphic designers when they first start their business. You determine your competitions' pricing strategies and then base your price on theirs. Either matching or beating their price. Once your business is established you should abandon Competitor Based Pricing for one of the other methods.
4) Project Based Pricing
Next to Hourly Rate Pricing, Project Based Pricing is the most common in the Graphic Design profession. With Project-Based Pricing you determine through experience and guessing what a job will cost. It is suggested you pad your estimates in case you encounter unforeseen hurdles along the way. If you complete the project faster than you had estimated you make a bigger profit.
5) Value Based Pricing
Value Based Pricing is the Holy Grail of the pricing strategies. With Value-Based Pricing you ignore the actual cost of the job and instead determine a price based on the perceived value your client will get from he project. Some clients will are willing to pay premium prices for that perceived value. Value Based Pricing is the most advanced of the pricing strategies and should be approached with care. However, when done right, Value Based Pricing will produce your highest profit.
When you succeed with your chosen pricing strategies you'll…
Attract better design clients
Have a better return on your time
Be able to devote more time per project
Have less trouble dealing with your clients
If I missed any pricing strategies please leave a comment at resourcefuldesigner.com/episode11
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This week's resource is the font management software Suitcase Fusion from Extensis. I've been using Suitcase Fusion to manage my fonts for over 15 years and I have never thought about switching to another option. Suitcase Fusion allows you to organize your fonts and activate/deactivate them as you need them. You can tag your fonts with provided styles or create your own allowing you to easily search through and find the font you need amongst the thousands on your computer.
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Running a graphic design or web design business all by yourself isn't easy. If there are any struggles you face running your design business please reach out to me. I'll do my best to help you by addressing your issues in a future blog post or podcast episode here at Resourceful Designer. You can reach me at email@example.com