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Resourceful Designer podcast: Offering tips, tricks and advice for starting and growing your graphic or web design business.

Are you charging enough for your design services?

Many home-based designers don't charge high enough for their services. They undervalue their work and struggle to find meaningful relationships with great clients. And although it might sound counterintuitive, when you find yourself in this situation, the solution is to raise your prices.

It's been proven time and again that the more you charge, the better and more appreciative your clients will be. But when should you raise your design prices? Below are ten indicators to let you know it's time to increase yours.

But before we get to them, here's a quick way to determine your hourly rate. For the record, I don't believe you should be charging by the hour. The following just gives you an idea of where you stand.

Calculating your hourly design rate.

Say you want to make $60,000 per year, a realistic number for a freelance designer that allows for comfortable living. As an employee working 9-5 for someone else, you would need an hourly rate of $28.85 to make $60K annually. But you're not an employee getting paid for an 8 hour day, five days per week. You're a home-based designer, a freelancer if you want to use that term, and there's nothing steady about a freelancer's income.

To make $60,000 as a home-based designer, how much do you need to charge as an hourly rate? Let's do the math.

There are 260 weekdays per year. Let's eliminate 25 days for vacation and other miscellaneous days. (3 weeks vacation plus sick days, medical appointments, children's activities, etc.)

That leaves us with 235 working days per year.

During an 8 hour workday, freelancers average 4.5 billable hours. This adds up to 1057.5 billable hours per year.

So $60,000 per year, divided by 1057.5 billable hours, equals $56.74/hour (let's round it up to $57.)

$60,000 ÷ 1057.5 hours = $57/hour (rounded up)

Although you shouldn't be charging hourly for your design services, knowing your hourly rate helps you figure out if you are charging enough per design project.

10 Signs You Should Raise Your Design Prices

1. You're super busy and starting to feel overwhelmed.

All the big business sites (Forbes, Entrepreneur, Inc., Business Weekly) all say the same thing, having a back-log of projects or a waiting list of clients or just being super busy all the time is a sign that you are not charging enough for your services.

The strategy here is that raising your rates, and being more selective in who you work with, will lessen the fell of overwhelm, but the higher prices you're charging will make up for any loss incurred from having fewer clients.

2. You're attracting undesirable clients.

Are you attracting the type of client that doesn't put much value in what you do? Clients that want it all but are not willing to pay much for it? Clients, that micro-manage you complain and criticize your work, or tell you how to do your job? Clients that would leave you in a heartbeat for a competitor to save a buck?

If this sounds like the type of client you're currently working with, raising your rates should fix the problem. Those clients will stop bothering you and go looking for a less expensive solution.

Your new rates will attract new clients who are willing to pay higher prices. Plus, they'll trust and value your services and are likely to stay loyal, even if a lower cost option presents itself.

3 You're not landing your ideal clients.

If clients are reaching out to you but not hiring you, it might be because your prices are too low.

When someone is expecting to pay a certain amount for a project, and you quote a price lower than they expected, red flags go up, and they start wondering if perhaps you're qualified or experienced enough for what they need. They'll imagine all sorts of deficiencies to justify your low prices.

So if you're losing more clients than you're landing, consider raising your prices.

4. You start offering a new service.

Have you learnt a new skill such as video editing or 3D animation and have added it to your services? New skills and services make you more valuable to clients, and your rates should reflect it.

The convenience of getting more services from you instead of needing to hire additional people is worth the extra expense to clients.

5. You're price-matching your competition.

A strategy used by many freelancers is to price-match their competition or even undercut them. This only works if the service you offer is equal to, or inferior to what your competition offers.

If you believe you are a better designer than your local competition, then indicate it with higher prices.

From a client's perspective, a designer charging $3,000 for a website must be a better web designer than one charging $2,000. Many clients want to work with the best and won't hesitate about the price.

6. Your competition charges much more than you.

On the flip side of #5, if your prices are much lower than your competitions' prices, then you'll develop a reputation as the cheapest designer around, which is not a good thing. If you're viewed as the cheapest design, clients will never take you seriously.

7. The cost of doing business has increased.

Face it; inflation is as sure a thing as death and taxes. To remain profitable, you must match the inflation rate with the money you bring in.

Keep track of your business expenses year over year, and if you notice your expense costs going up, make sure to compensate for them with a price increase.

8. You haven't raised your price in over a year.

The best strategy you can employ is to raise your price a little bit every year. If you wait too long before increasing your rates, your clients will feel the impact.

It's much easier for a client to accept a small 5% yearly increase in your price than to accept a 25% price increase after five years of paying the same rate.

9. You've niched down.

By choosing a niche, you're establishing yourself as an expert in that area. And as an expert, you deserve to be paid more for your expertise. It's the reason doctors with a specialty make more money than general practitioners. It's their expertise and perceived value.

Clients are willing to spend more to hire someone who understands them.

10. You tried charging a higher rate and got the job.

A perfect way to see if a rate increase is to test it out. If you usually charge $600 for a logo design, try charging $800 the next time someone asks. If the client agrees, it's a good indication that a price increase is in order.


What it comes down to is this. If you are not charging what you are truly worth, you are doing your clients a disservice. Being the lowest or second-lowest designer in your market has no advantages to you. It's great for the cheap clients looking to hire from the bottom of the barrel, but that does you no good. In fact, it could dig you into a hole that will be very difficult to get out of.

You should be pricing yourself above average if not closer to the top when it comes to your local competition. If you're not there now, do something about it.

Don't worry about increasing your prices; everybody does it. In fact, if you don't increase your prices, you'll be falling behind as the price of things like fuel for your car, utility bills, groceries, clothing and all your day to day necessities go up.

Benefits of raising your prices.

1. Higher rates attract higher-quality clients.

It's a case of “you get what you pay for,” and some clients are willing to invest in the best.

2. Your clients will better value your work.

Lower priced designers are simply a body for hire, easily replaceable. When you charge premium prices, clients will treat you with respect and trust your authority.

3. Your clients will get better results.

Designers who charge more tend to work with fewer clients, allowing them to devote more time and energy to each project, producing better results for their clients.

4. You build better relationships with your clients.

With fewer clients who better value your work, and who see better results from dealing with you, it's inevitable that you'll build better relationships. And better relationships mean more recurring work and more referrals.

5. Charging higher prices boost your confidence and self-worth.

Once you start charging premium prices and start landing new clients, you'll feel great about yourself. That confidence and self-worth will be evident when it comes to networking, promoting and marketing your services. People will take note and want to work with you.

What are you waiting for? Raise your rates today.

What's your experience with raising your design prices?

Let me know by leaving a comment for this episode.

Tip of the week: Aliases (Mac), Shortcuts (Windows)

Aliases is an often overlooked featue of the MacOS. Aliases act as a link or portal to its original counterpart on your computer. Opening an Alias of a file will open the original file, Opening an Alias of a folder will take you to the original folder.

To creat an Alias, Right-Click on a file or folder and select “Make Alias” (Create Shortcut on Windows). You can place your Alias files anywhere on your comptuer for easier access to the orignal file/folder.

Listen to the podcast episode to hear how I use Aliases to help with file management and to improve my productivity.

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I want to help you.

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 feedback@resourcefuldesigner.com

My Voice-Over Guy.

Resourceful Designer podcast intros are performed by the amazing Wayne Henderson of MediaVoiceOvers.com. Wayne is available to help you with any voice-over work you require.