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Design Fees vs. Hourly – A Designer’s Dilemma

Designers often ask me why they should charge a fee instead of charging hourly for their work. They’ve charged hourly for years and it has worked…sort of.

Why change?

First of all, you don’t record or track your time consistently or accurately. So you really don’t know how much of your valuable time you’ve spent… which equals time and money lost.

Then it gets worse… you don’t invoice the little bit of time that you did keep track of. You add up the time and look at the bill and say, “Oh, he is not going to pay me that much.” So, again, you’re not charging for those precious hours of your work.

Second, your income is limited by the number of hours you have available to sell. Realistically, if you’re working alone, 20 hours is about the maximum you can sell due to the 20 to 30 hours of “homework” you have to do to complete a good design job. Whereas design fees don’t have this limitation!

Third, when you become proficient and fast at some tasks, such as choosing paint colors or selecting the fabrics for a room, you’re charging fewer hours. This means that you are charging less money than another designer who is not nearly as good or experienced as you.

Now that’s just crazy!

If you’re not convinced by now, then here are 3 BIG reasons to make the switch:

  • Clients love fixed fees for specific services! They’ll know up front what the design services will cost, and you know up front how much you will make so everyone stays happy.Simply write a clear scope of services in your Letter of Agreement and when they want to “add on” you can tell them (with a smile) how much extra billable time it’ll cost.
  • Often clients who pay by the hour decide they have paid enough design fees before the job is completed. They’ll stop the project altogether or start doing parts of it themselves to keep your fees down. This is a bad situation all the way around since the desired outcome of a project is not only to be paid a fair rate, but to photograph the space too.If you and the client agree upon the time and product budget prior to starting, you’ll budget properly and completed the job…the way you want!
  • If one part of a fee-based job takes you a little longer than you expected then there will be another part that goes faster and easier.Figure out your time allocations for design tasks before presenting the Letter of Agreement and give yourself a generous cushion to confidently call out a fee. Then you can happily take the time needed to resolve an issue and do it right without having to bill or explain to the client why the extra time was needed… because it all evens out in the end.

The moral of the story? The fair and professional way to charge for a design job is with a fee for specific services.

So do yourself and your client a favor – switch to a fee base for your next job!

Want to feel confident about calling out an appropriate fee for your design services? Want to stop the pattern of undercharging and over delivering?

You need to attend the Design Biz Money and Pricing Summit.

Click Here for More Information

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