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How is it that we determine the variables of worth and value? This is a question that faces basically every human being living. Of course, it can extend to social areas of life, but we’re thinking specifically on the issue of pricing as a designer.

Every time you buy something, unless you’re ridiculously rich (or foolish), you have to weigh up it’s worth and value. Various questions come to mind,

• Do I really need it?
• Can I afford it?
• Could I get it cheaper elsewhere?
• Could I get it better elsewhere?

…and on and on it goes.

But for freelancers, consultants, and anyone who’s selling anything at all, you have to flip the coin. When thinking about your products or services, you have to determine the ‘worth’, in order to reflect an accurate ‘value’, and it’s a lot easier said than done.

So how do you do it? Well, I’m facing this question right now, so I’m going to share my thoughts, and hopefully, together, we can figure it out.

Major factor #1 – Business Overheads

The purpose of any business is to be profitable. If it’s not profitable, then it becomes charitable. So, when thinking about starting a business, one must calculate all the expenses that will be incurred as a direct result. When it comes to myself, I think firstly of the price of the tools I use;

• Macbook Pro
• Larger monitor
• Storage
• Adobe products and other software
• Fonts/Images
• Books
• Web hosting
• Furniture
• Broadband connection
• Electricity
• Paper, ink, and other miscellaneous items

Some of these may last for years, others are extremely variable, but for a nice round figure, lets say these overheads extend to an average of US$6,000/annum. That’s $500/month I need to be aware of before I get started. Yes, some months I may have absolutely nothing to pay out (if I pay bills annually), but what if I need to upgrade my computer, software, and furniture all in the same month? I may be out $5,000 in a single month, so I need to plan ahead, rather than get caught out.

Major Factor #2 – Part-time or Full-time

I think this comes in as the second most vital aspect, which needs to be considered. Using myself as an example again, I’m starting this out on a part-time basis. What this means is, I currently exist with the ability to put food on the table, clothes on my back, and a roof over my head; I am surviving.

I’ve also acquired over time (for some they may need to get a loan), all I need to at least make a start on the business. This alleviates any possible start up debt or cost, and means ‘taking the plunge’ isn’t so scary.

The reason this factor is major, is that for those in a position similar to mine, it means if we want to, we can afford to begin by offering our services at a reduced rate. We’re not relying on what we earn to ‘survive’; we already have that covered.

Major Factor #3 – Qualifications/Experience

In order to possess an honest confidence, that your services/products deserve to be priced at the top end of the market, you’re going to have to be able to prove to people why you’re worth it. Although you might know you’re providing outstanding quality, others don’t. They need to be convinced.Likewise, if you’ve little real world experience, you’re going to have little to provide people, to convince them to part with their cash for what you offer.

At the moment, the Alpha portfolio is limited (that is in ‘quantity’ not quality), so that plays a part in my thinking when it comes to price. However, I need to be careful, and I’ll tell you why in the next point.

Major Factor #4 – Image

It’s all very well, being prepared to offer your products/services for next to nothing when you start out. However, you may be unwittingly developing your brand as one that is ‘cheap’.Such an image may not bother you, and may in fact be the very image you desire to create. Like here in Australia, the franchise store ‘Cheap as Chips’, doesn’t have the ambition of become expensive and prestigious. It makes its money by purchasing huge quantities of cheaper items at a few cents per item, and selling them for a dollar a piece.

When you get a reputation among customers for being cheap, such an image may immediately drive away other possible clientele. Some people are looking for a professional outfit, and whether we like it or not, price often reflects a professional service.

The image you’re creating today, is developing and contributing to your future image.

Major Factor #5 - Respect

In the field of design, there’s a drawback to offering your services too cheap; lost respect.Designers are very conscious of the need to educate the public, that design isn’t just someone with the ability to use Photoshop. So, whenever someone pops on the scene claiming to be a ‘designer’ and charges peanuts, they get frustrated.

This might not bother you now, but one day it might. A few years down the line, when you’ve gained experience, you might get married, a mortgage, children, and other things which will force you to put your prices up considerably. Then you’ll come across people who will wonder why you’re now ‘so expensive’, because they know people (like you are now), who undervalue the level of skill and ability required to be a truly great designer.

Many professional designers are well aware of this, and the impact it has on the field in general. So going down this road, just to let you know, may create a few enemies. At very least, you’ll not get much respect or love, from those who are in your field.

Conclusion

At the end of the day, when it comes to pricing, the buck stops with you. You are the one who’s going to have to decide what you’re worth. There are risks no matter what decision you end up making.

Too low, and you’ll end up over worked, undervalued, and disrespected in your field. Too high, and you’ll find it difficult to find clients, and the level of expectancy with those you do get, will be much greater.

Whatever you do, think about it carefully.

Do you think I’ve missed any other factors, which ought to be included? Let us know.

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