AboutPeter Gabany Expertise Strategic planning:
Objective based advertising, Ad creative, Writing, Photography - buying and making, Illustration - buying, Print, Outdoor, Event, Media, Media Planning, Broadcast, How to select an agency, What the client must provide, Pitching a client / being pitched
Experience Over 25 years in the business - 22 years operating an agency. Creative direction and agency management.
Question I'm a Graphic Designer/Visual Communications Specialist with 15 years experience corporate in-house. In Memphis, TN where the market isn't very profitable. I have a friend (someone I've been close to for over 15 years) that came to me requesting the design of two logos for a company/product she plans to start. I've done tiny jobs for her over the years like invitations, wedding stationary, etc.
When I met with her, she sat me down with another gentleman who is her "adviser" I guess. He seemed to conduct the meeting. Anyway, before she started talking I had to sign a Confidentiality Statement. She explained the product afterwards. One logo is for the "mother company" and the other is for the product. So fine, we agreed on pricing for the logos which I'm doing for practically nothing, but I quoted her this by text before having a meeting of what the usage was. MISTAKE #1 I know! So then they asked me to sketch out a drawing based on their idea/description of the product. So I'm thinking, you don't have a product thats developed yet and want me to provide a drawing for it. Is that not a form of industrial design and should I do this without proper compensation? I would really be giving them the concept to base their product on. Even if I drew it on a napkin, aren't I deserving of something? Then they want to take it to get a CAD rendering. Then they went on requesting promotional materials, business stationary, package design and web design... The Advisor then asks me what is my cost estimate for everything? I explained that i wasn't prepared to go over that at the time and would provide an itemized proposal/contract within 2 days. I gave them a proposal in which I know was unbelievably low and he scratched through it. Told me to rethink my fees for the drawings ($600), packaging design ($500) and web design ($600).
Since I've never done "product development" which it seems she's asking how do I charge for those "simple sketches" as she calls it? And for the website, I'm not a site builder but I do design the pages. They questioned why would they want me to just do the look of the site but pay someone else to develop it. I told them that the guy I knew would only charge $900 and he immediately said that was too high along with my fee. Also for the package design, which is my day job and has been for the last 10 years, he said it was too much. What the hell am I supposed to do, work for peanuts? The way i look at it, I do all this work, they pay me one measly fee, go make millions off the product, which i've designed and never see me again... They wanted to reassure me that they only want me to do the job and don't intend on going to anyone else.
Timeframe... keep in mind the product hasn't even been sketched, they want it in stores by Christmas 2009. I have lost so much sleep over this already cause I can't believe they want ALL this for NOTHING!
Also, if you have the time could I forward you my short proposal/contract for this project? This is so new for me.
Answer Friends till the end and boy oh boy this is the end.
We have all been here in some form or another. I do not know what your time is but let's just say a low $40,000 per year. Then your time is worth at least $25/hour X a standard industry factor of 2.5 to 3 X. For simplicity let's just say $75/hour + expenses. we assume that you have an office (even a home office), software and computer and marketing expenses etc. So you should not be too hard pressed to say that your hourly rate is $100/hour. According to the RGD Ontario and AIGA salary surveys that would place you some where in the middle of the pack. Some are charging upwards of $350 - $600/hour.
But as a designer and principle of the firm, $100 is about fair. This is based on billing 1,600 hours per year and if you can do that you are far better than most.
So back to the case at hand. STOP making excuses. You have a right to make a living. You have a right to charge a competitive rate. You have no excuse if you proceed down this path of business destruction. You are undermining future business and your fellow graphic designer.I believe, unless they are total rats when they asked you to rethink your fees you took it the wrong way - you aren't too high, you are far too low. I do not know the details of this project as you do but it looks like you have under priced the job by about $13,300. That is correct - this job on first blush is about a $15,000 job and that would be low balling.
You say that you have never done product development - well do you know some industrial designers that you could subcontract to? You are not a web programmer, but can you design web work and can you subcontract the programming?
I would walk from this job in a heartbeat. People that don't want to pay anything should get nothing. The sooner you dig in your attitude you will emerge a winner.
So how to proceed.
You need to go back to them and THANK them for allowing you to rethink your pricing. Create a check list. Account management time, Creative direction time (concepts for the product - rough sketches),design time (once you have the concept, taking it further for development), design coordination fee (collaborating with the industrial designer to bring your concept to fruition). Communications planning (I assume that you don't write so you need to collaborate with a writer and or a marketing strategist), corporate identity (bring that initial design to an executional level (create a standards manual), brochure and web design. Coordination of all the above to deliver an end to end communications platform.
Well, they will never go for that…
oh says you and what if they don't what have you lost? Think about it and answer it honestly. You have lost the opportunity to seek out other well paid work. If I were you I would take this opportunity to create a proposal like you have never done before. Create the essence that you bring to the project (your brand essence - believe in yourself - in your abilities - in your design). Break out the job into three or four dimensions. Create a serious time-line (Gant chart). Show a schedule of pricing. And most importantly tier a payment structure for each phase of the project where you are PAID up front for each phase at least 25% of the fee and preferably 33%. And whatever you do - don't do any work until you have a sign, authorized agreement.
Well that will be a waste of time… and what are you doing if you don't do this or if you ignore these warnings? Use this time to do all I've said above. Get your operations and procedures in order so that you can do this again in a heart beat and use this as your standard operating process.
Then present this to your friend and their colleagues. If they throw you out you will have lost nothing - absolutely nothing. If you do it, I see no fewer that 130 hours work here - seriously. If you spend 25% of that time managing to construct a process - you will earn that back in spades. If you take the job for $1,700 you will loose, worry yourself to death over the job, not be appreciated and lose the potential of earning real money.
This stuff happens too much. It makes me mad. I hope that I have encouraged you towards another path. Please let me know how it goes. If I can help further - please let me know. If you need a sample agreement I can direct you.
