Logo design, logo designer | How 20 designers charge their clients - part 2

Following on from part one in the series, seven more top notch designers talk about how they manage their finances when dealing with clients.

Chris Spooner, of Spoon Graphics

How do you normally charge clients?
Once a range of information has been gathered about the project I estimate the costings based on the average number of hours, this is multiplied by my personal hourly rate and supplied as an overall cost.
This estimate is then sent over to the client for approval, when the client is happy to start work on the project an initial 50% deposit is collected. The project gets underway and design material is produced. Upon completion the final invoice for the remaining 50% is created, or total remaining balance if additional changes or features have been introduced during the project.

What methods of payment do you accept?
I accept Bank Transfers, PayPal, and cheques, with PayPal being the most common form of payment, particularly with overseas clients. The integrated payment system with FreshBooks invoicing app. also allows online invoice payments via PayPal, which can be handy in streamlining the process, immediately marking the invoice as paid.

Why would you recommend working this way?
Working on a 50% deposit is definitely recommended, from a designer’s point of view it acts as both protection and a deterrent against unscrupulous clients who may be tempted to skip payment. I have yet to find a client who has any issue with an up front payment, with most being more than happy and even expecting to pay up front. From the client’s point of view this also helps show how the designer values their service and work.

In terms of payment solutions, Bank Transfers are my favourite method of payment given the speed and ease, unfortunately this becomes a little tricky when overseas work is involved. This is where PayPal steps in, although the fees do tend to be a little depressing! - But I suppose these are relative when considering the benefits.

Visit Chris’ website here: Spoon Graphics.

Antonio Carusone, of AisleOne

How do you normally charge clients?
I charge mostly by an hourly rate. I try to estimate how many hours I will work on the project that way I can ask for a percentage of the charge upfront before I begin work.

How do you accept payment?
Pretty much always a cheque.

Why would you recommend working this way?
Charging hourly seems to yield a more realistic payment over say a flat rate, unless of course you work less than the total flat rate, which almost never happens. Also it’s a good idea to ask for a percentage of the payment up front just in case the client decides to bail on you. And cheques are easy to deal with and are more professional than asking for cash.

Visit Antonio’s website here: AisleOne.

Leslie Tane, of Leslie Tane Design

How do you normally charge clients?
For new clients / projects, I always charge by project (versus by the hour). I ask for either 1/2 up front and 1/2 at completion or or 1/3 up front, the second 1/3 at design approval and the final 1/3 at completion. I usually split the cost in thirds for projects over $5000, both for the client’s convenience and, since the larger projects usually span a longer amount of time until completion, so that I have a more steady stream of money coming in through the course of the project.

What methods of payment do you accept?
I accept cash, cheques and credit cards (through PayPal). The easier it is for clients to pay, the more quickly they tend to do it. I also always enclose a SASE (self-addressed stamped envelope) with my invoices for my client’s convenience.

Why would you recommend working this way?
Working this way has developed over time, and I definitely recommend it. I’ve found that charging by the project versus by the hour leaves much less room for confusion and misunderstandings. There is a clause in my contracts (which I ALWAYS use) stating that additional work not covered in the contract will be billed for separately and will not be commenced until the client gives approval. That way I don’t get stuck doing a lot of extra work that’s not billable. Charging by the hour seems counter-intuitive to me, since you make less money if you work quickly and efficiently.

I absolutely recommend getting the first payment up front. This really weeds out people who are not serious about the work. I used to start on projects as soon as I got the verbal go ahead, but I don’t do that anymore. Signing a contract and making an initial payment show that the client is committed to the project. It’s amazing how many clients disappear between the “go ahead” conversation and the submission of the contract and payment. I don’t think it’s in bad faith, exactly, but I do think that clients sometimes don’t realize how much prep work, research, and forethought go into the beginning of a project, so they don’t consider that you’re really “working” until they see some comps.

Visit Leslie’s website here: Leslie Tane Design.

Gino Orlandi, of You the Designer

How do you normally charge clients?
I usually charge a flat fee with a downpayment of half before I begin work. I also do not send final files until rest of payment has been sent.

What methods of payment do you accept?
I usually take payments via PayPal, because its fast.

Why would you recommend working this way?
PayPal allows me to being projects quicker and have access to funds faster, and the dowpayment and requiring the final payment before final files are sent ensure you do not get cheated.

Visit Gino’s website here: You the Designer.

Brian Yerkes, of Brian Joseph Studios

How do you normally charge clients?
I provide a full project estimate and present it to the client along with a proposal. I then charge the client 50% of the project total up front to be paid before the project commences. The final 50% is required once the project is completed.

My estimates are based on two factors:

1. My hourly rate
2. Competitor’s rates

Knowledge is power, and knowing what your competitors are charging is vital to ensure that you are able to place your company at the price point you want to be at, whether it is at the high end or the low end.

For smaller pieces of work, like a few updates to a website page and if it is less than $1,000, I require 100% up front.

What methods of payment do you accept?
We accept cheques and credit cards. I am slightly torn on whether or not to continue excepting credit cards as you obviously lose that 3% of each transaction. It is a good thing for your clients however, especially those with tight budgets. It allows them to pay for your services and put it on credit rather than having to have the money in available cash at that time.

For larger projects, we require that the client pays the initial 50% by cheque. This seems to ensure that the client at least has a decent amount of money at their disposal, and it gives us more of a secure feeling that we will receive the final 50% when the project has been completed.

One negative aspect of receiving cheques is that you have to wait to receive it in the post. If you have a client in another country, this process can take a few days. This is where bank transfers, and PayPal can help a lot.

Why would you recommend working this way?
I would recommend requiring 50% up front because it asks the client to put commitment into the project. At a certain point during the project, you are working over what the initial 50% will cover, so for the remainder of the project, you are then showing your commitment to the client, as you work towards the final payment. This keeps the playing field level for both of you and provides a nice basis for a working relationship.

Visit Brian’s website here: Brian Joseph Studios.

Anthony Zinni, of Positive Space Blog

How do you normally charge clients?
Normally I charge a flat fee for typical projects with 50% due upfront. However if a project is large this percentage may be as low as 25%. I will then periodically send an invoice when either milestones have been completed or a significant portion of the project has been completed.

Lately I have been working on a lot of large websites where the details are hard to cement upfront. In these cases I try to obtain as many details as possible and then provide an estimate with variance applied for the unknown areas. In this situation I take 33% - 25% of the lower end of the estimate.

About a two years back I had 3 clients that were on retainer. Ultimately I found this type of work to suck up too much of my time and kept me away from bigger more interesting projects. Even though I may have been billing only 2-3 hours a day to these clients all of the back and forth communication was sucking my billable hours. No I only consider retainer based work on a client by client basis, and when the client in very organized.

What methods of payment do you accept?
I have only ever needed to accept cheques, however bank transfer would be ok as well. I find that PayPal is only a necessity when the time line is extremely short. I choose to avoid these projects because I am more interested in projects that give me the opportunity to do my best work, so this has never been an issue.

Why would you recommend working this way?
I would recommend a pricing strategy similar to mine because the goal of it is to deliver work of the highest quality. After making sure to mitigate any potential risk, my billing processes are based on mutually beneficial relationships with clients. They allow me to deliver the highest possible quality and hopefully create some ROI for my clients.

Visit Tony’s website here: Positive Space Blog.

Lauren Krause, of Creative Curio

How do you normally charge clients?
I collect a percentage up front and at major milestones (determined in advance, like delivery of initial creative, if it’s a website then delivery of first level pages, etc). Usually something like 30% up front, 30% at milestone 1, 30% at milestone 2, 10% upon completion. At each stage, I send a separate invoice. A proposal up front will break down the cost. I calculate the total price with my own “secret” hourly rate (in other words, the client never knows the hourly) and how many hours I think each step will take me. Always remember to include extra hours for meetings (including drive time), email, phone calls and unforeseen problems — I never seem to include enough for this! I created an interactive form / worksheet for Tara a while ago for calculating an appropriate hourly rate.

What methods of payment do you accept?
I don’t have any international clients, so I always ask for a cheque. It’s not been a problem so far and I haven’t had a need for any other kind of payment.

Why would you recommend working this way?
It’s always best to have an initial down payment; it shows that the client is serious and it gives you incentive to take the project seriously, too. The down payment and milestone payments also help offset your costs while working (you’ll probably have to pay rent or buy food before the project is finished!) and you get a reward for major accomplishments during the project.

Visit Lauren’s website here: Creative Curio.

Thanks again

Thank you once more to everyone who has contributed. I’m enjoying your financial insights, and I’m sure others are benefiting from your experience.

Third and final part coming next

To round up this mini-series, the third and final part will feature answers from other successful designers, such as Jonathan Selikoff, Adelle Charles, and Graham Smith. I’ll also be mentioning some further resources, which are definitely worth a read.

For those of you not reading via RSS or email subscriptions, why not subscribe now? It’s free, and I promise not to knowingly spam you, nor give your details to anyone else, ever.

UPDATE: All parts now published.

How 20 designers charge their clients

1. How 20 designers charge their clients — part 1
2. How 20 designers charge their clients — part 2
3. How 20 designers charge their clients — part 3

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• How 20 designers charge their clients - part 1 (28)
• How 20 designers charge their clients - part 3 (21)
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• First steps to graphic design pricing (42)

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