Episode 5 Pricing

February 22nd 2007

This week it’s all about the moolah! Setting your rates can be a real challenge especially in the beginning. I’ll give you a few tips and figures to help you better establish your pricing structure, as well as warn you about potential pitfalls. Be sure to tune in next time for a lively discussion on project management.

Sit down, put your feet up and get comfortable, because this weeks episode is a doozy! Although I do get a bit long winded, we’ll cover a lot of ground along the way. As a quick disclaimer the views and opinions discussed in this episode are just that; my opinions! They are in no way rules or guidelines, and they don’t apply to everyone and every situation. With that said, here’s a quick outline of this week’s episode:

Setting your rates starting out
Red flags to avoid
Raising your prices

Some helpful links:

How Much Should a Design Cost? (excellent pricing article from Pearsonified.com)
How to Set a Price for Web Design Work (About.com article)
Good Design is Good Business (article from InfintieWebDesign.com)
Make me a free website? (funny little animation of a true to life scenario)
Raising Rates (good article on raising rate if you run a design firm)
TheBlogStudio.com (rate sheet)

Episode 5 [27:17m]: Play Now | Play in Popup | Download

23 Responses to “Episode 5 Pricing”

Great Show Josh,
I’m thinking it might be good for you to do a show on writing proposals and contracts, dos and don’ts.

For example:
Whats the difference between them.
Should proposals include a price range, or a quote?
Should proposals include a timeline – or should this be in the contract?

These are just a few of the questions I commonly get from students and other new designers.

snailface on February 22nd, 2007 at 9:02 am

Another great episode! I agree with the poster above, a show about documentation would be great! Also, maybe mention what tools you use for invoices, project management, etc.

Cory on February 22nd, 2007 at 9:10 pm

An excellent show josh, keep up the awesome work. I too was going to suggest the next show on contracts and proposals. I also agree that with the important subjects like price, your show may run a little longer than usual so its cool, im sure most of your listeners appreciate all the effort you put in to your podcast.

kas on February 23rd, 2007 at 1:54 am

Well…This is my fiirst time checking out Tweakcast and I think that yu did a great job…I am a designer and illustrator and think that’s rally important to emphasize that people need to value their talent and their work… Artists can have great talent, but they do’t always have the confidence to go with it, which I guess would come from experience….

Nick Ramos on February 24th, 2007 at 7:44 am

Another excellent show. Thanks for your hard work, Josh.

Perhaps, if you do the show suggested above regarding proposals and contracts, you could also discuss some of the various online billing and invoicing systems. I’ve tried several but have often wondered what other people use and enjoy.

With regard to cost, you’re absolutely right about giving away the farm. By giving deep discounts, you’re merely setting a precedent for more giveaways. Even if those people do spread the word for you, it will be something like “This guy really works cheap. He did my site for next to nothing. You should definitely call him.” That is not the kind of PR you want out there. Knowing your worth and charging accordingly sets a higher standard in the mind of your client. We all experience this as comsumers as we are often willing to pay a premium price for something we know is of a higher quality.

Jeremy P on February 25th, 2007 at 9:40 pm

Good show, inspiring and motivating to say the least!

I’ve got a suggestion for a show, I’d certainly be interested in it and I guess I’m not alone with that – could you go through meeting the client and asking the right questions in the right way to find out exactly what you need to work on a project or draw up a proposal? I find thinking about this very daunting! Stuttery client meetings with pieces of paper flying everywhere comes to mind, I’d love to be able to approach a client knowing exactly what I need to ask and just be totally professional!

Thanks again for another great show!

- Andrew

Andrew Wiliams on February 26th, 2007 at 3:06 am

[...] sorry, my minimums are at $750 for the work you’re looking to get done.” – And there’s a perfect example in this episode of Tweak. Basically, the situation is, Josh Itawa doesn’t go below his minimum price. For [...]

fruda » Creativity has no price! on February 27th, 2007 at 7:25 pm

I really found this episode extremely informative. I’m in the near same situation you were describing. I just started my company, and was a little nervous raising my prices. This was great though.

Thanks!

Lara on February 28th, 2007 at 2:44 pm

Your points on “free” work hit real close to home.

For the first time a few weeks ago I comepleted some logo concepts for a potential client. One red flag that went off in my head, and when I realized that I was doing something really stupid was at the end of my presentation he said “let me run this by my board”. I have a degree in Graphic Design and almost 10 years experince. I should have known better. Nedless to say but I did not get the job.

Thanks for having the brass to talk pricing/dollars.

Chad on February 28th, 2007 at 9:45 pm

Hey – great podcast, and thanks for the link! I want to address the issue of being paid before launching a client’s site.

After being burned one time too many, we implemented an across the board policy of receiving payment in full prior to making a client’s site public. We do all our development work on our own server, and won’t move the site or release the files until the payment is in our hands.

We have had ZERO problems with this, in large part because we are right up front with it. We take our work very seriously, and we’re professionals. Our clients respect this – it’s a large reason why they hire us in the first place.

We specifically mention payment terms in our proposals and contracts, and make sure to discuss it with the client too. By doing this up front, the whole getting paid process works much more smoothly.

Peter Flaschner on March 1st, 2007 at 6:28 am

I really, really liked this show. I had no idea what kind of prices to use and now I see that I have been underpricing. It also put a lot of things in perspective, like when you talked about the animation about the car salesman and doing work for free. Your show is awesome, thanks.

Jesse on March 2nd, 2007 at 2:16 pm

Another excellent show Josh.

Can you talk about maintenance and updates.

Zonk on March 3rd, 2007 at 9:43 am

this my first time here, nice blog, useful info .. ill be checking it more often, have a nice day

dadan on March 4th, 2007 at 6:59 am

Your show is F’ing awesome! Thanks for talking about real life stuff!

Patrick on March 4th, 2007 at 6:22 pm

[...] above article lead me to the second one, or more correctly, the first podcast I have listened to. The podcast was a great listen and I would highly advise anyone involved in design and often pricing their work [...]

Lone Space » Time to catchup on March 11th, 2007 at 6:46 am

Pricing as you mentioned is often not talked about and often companies and individuals are blocked from finding pricing on web design companies websites by an annoying quote me form with no hints as to how much a typical project would cost. I think the least design companies can do is hint at a few different price brackets so the customer gets an idea of the pricing structure in place, if not display their prices upfront anyway. I know all projects are different but this is something I know ticks off a lot of SME’s. Great to hear another designer being upfront about pricing and I am in agreement that I will not look at a project below a certain amount now and this does seem to install trust – strangely. Great podcast!

Anthony on March 13th, 2007 at 12:44 am

a quick article i wrote about pricing may be of interest to you and to get some your perspectives. First rule of web design

Anthony on March 13th, 2007 at 1:13 am

Really awesome show. I am eagerly anticipating more great episodes. Thanks!

Kyle on March 14th, 2007 at 12:24 am

Another great episode!

Don’t worry about keeping it short!

Dennis on March 18th, 2007 at 6:28 pm

I somehow ‘stumbled’ onto your website. This is the first episode i listend to and i have to say LOVE IT!. I’ve been doing graphic design off and on for over 10 years for a church that basically exploited the little i did know and never payed me. Now that I am doing it as a company (web based) and putting myself throught school (art isntitute) price is a MAJOR issue for me. many times, people LOVE my work, but often times try to talk me down, sing the ‘im broke’ blues, say they tell people i did it, barter, but i still come up short, etc etc. basically dont want to pay. I have to learn to stay firm on my rates, and price accordignly. especially being a research JUNKIE, most clients i deal with get ALOT more then they initially came for also.
looking foward to hearing the other podcasts!

N. Lopez

Niki Lopez on March 21st, 2007 at 7:46 pm

[...] $$ Pricing $$ [...]

Illustration Link Feast | DaniDraws.com on May 10th, 2007 at 4:37 am

For some reason, the podcast cuts off and starts over about 2/3 of the way through… any ideas why?

Minneapolis Web Designer on August 11th, 2008 at 4:05 pm

Hi. I’m a newcomer to this podcast and have been listening to older shows. I just finished listening to the Pricing show, and it was dead on. Thanks for putting it together.

I was recently laid off, so I took it as a sign to start fully freelancing. It’s been a struggle, but so far the few clients I do have, have been pretty receptive. After freelancing off and on for the past few years on the side, I raised my rate by $10/hr and it’s been fine so far.

Now, which one should I listen to next?

Rob Christianson on February 4th, 2009 at 1:30 pm