IXD302 Week 6 Business of Design

This week we covered what to include in a proposal with a particular focus on pricing and payment schedule.

To begin we looked at the benefits of creating a proposal. The general rule is that it is always a good idea to do a proposal, even with family and friends if not more so. A proposal can be created under different circumstances such as after you have secured work with a client. In this instance, a proposal is just a matter of getting everything on paper. Outlining what you’re going to do, when you’re going to do it, what you need from the client to do your work and when and how much you will be paid etc. This ensures that all aspects of the job have been discussed and agreed upon and helps to avoid any unpleasant conversations down the line.

A proposal can also be created as a response to a government contract or a business that is putting out a tender that allows designers to compete for the work.  This requires creating a proposal to submit as a tender. When tendering a proposal you will need to add some additional information such as:

  • A copy of your contract
  • A bio about yourself and a quick overview of your company
  • A previous example of your work

Have them own their own domainRoles that are invoiced in the scope of work

Another important element of the proposal that needs to be considered is the scope of work. When a business manager is creating a proposal they will consider all the roles that will be required including Researchers, Designers, Writers, Strategists and Managers. They will consider how many people will fulfil each role, how much experience these individuals have in the area and how much they should charge for their time on that basis.

As a freelance designer, you have to cover all of these roles. Therefore, it’s a good idea to itemise the work that will go into each phase of the project and price accordingly. It is also helpful to display this breakdown in a proposal for clients to see as this helps the client to appreciate the value in what you are doing. A breakdown should also be included on invoices sp that the client knows what they are paying for.

Pricing and Payment Scheduling

Generally speaking, designers charge for time. It’s a designer’s ability, expertise and skill level that is really being paid for, but it is the time it takes to do the job that is attributed to the cost. Therefore, when pricing a job you estimate the time you think it will take you to complete each aspect of the project as outlined in the scope of work and multiply it with an hourly rate. It may also be wise to add a little extra time to this estimate to cover any unexpected stumbling blocks that might slow down the work.

good fast cheap image

Hourly rates will vary based on experience, skill, rank within the company. This is something to consider when freelancing. Clients are going to want the work to be fast, good and cheap. The rule is it can only ever be two of these things. My understanding of the above is that as a less experienced designer I would be following the above setting of good and cheap (within reason) as I do not have the skill level yet to deliver really high quality work quickly. Good and fast comes with experience. However good and fast may just be a matter of long hours which is something to consider as well. I find it can be easy to work long hours when you working for yourself as you’re less aware of your start and finish times, you’re also dealing with the client directly which personally makes me inclined to be more flexible. This can be where I would fall into the trap of trying to achieve all three outcomes and not charging enough for my work.

Know your value

We were advised this week to not do pro bono work for free unless it is something we are very passionate about and are getting a different benefit out of. For me, this might fall into design work for charities and good causes. I am, however, past the point of working for free to get experience. This is something I would have done in the past. In most cases, there was little payoff as I was designing for non-designers, which meant it gave me the experience of what it might be like to work with a client but I wasn’t able to get any design feedback from someone with a knowledge of the industry. There was an instance where I was given the opportunity to do a few small design pieces for a company for free. This was far more fruitful and I actually ended up getting a design job with that company after producing the work. There, therefore can be other benefits that pay off under the right circumstances. However, there is a line. Had I been given larger, more ongoing jobs by that company I would have had to start charging for my services. When working with a business I find this to be not as difficult, the area I struggle most with is charging family and friends.

Setting an hourly rate

Paula Scher

The national minimum wage will be £9.50 as of April 2022. This is a basic rate. Hourly rates will vary based on experience, skill, rank within the company. As university students, we will deserve more than the minimum wage as we are learning the skills and gaining experience of becoming good designers. This needs to be taken into consideration when it comes to an hourly rate. On this basis, you should not be charging less than £10 per hour for design work as a student of design.

Determining your hourly rate is an area I have been vastly underestimating myself. I think my main issue was that I wasn’t charging specifically by the hour. I was charging by project. As a rule, I would end up underestimating how long the project would take and barely end up with a minimum wage payment if even that.

In a study from Headline Studio, the statistics for 2021 NI creative salary statistics show that there is no discernable gender pay gap and the following salaries can be expected on the basis of positions:

  • Interns can expect £12-18k (£10 per hour)

  • Juniors can expect £19-25k (£15 per hour)

  • Midweights can expect £26-32k

  • Seniors can expect £34-40k

  • Management can expect £38k+

I also think this is largely based on the company you decide to work for e.g. large tech companies will likely be in a position to pay more and will see the value in paying their tech teams more than a smaller finance or banking company might.

If as an intern you earn as much as £18, 000 this breaks down to be roughly £10 an hour meeting the minimum wage. This is what you are being paid to work for a company which means, they provide the work and a steady salary.

As a freelancer, you need to determine your own value. Things that need to be taken into consideration when deciding your hourly rate are:

  • Your education and experience
  • The fact that you will not have a steady stream of work
  • What people will pay

As designers just entering the field charging around £15 an hour is reasonable given the fact that that is a junior designer salary broken down to an hourly rate. However, as you build your confidence in the area you will naturally want to charge more.

Image of wage calculator

Another way of deciding how much to pay is by calculating your age, years of experience (include university years here), the industry and your location. I think a good way of deciding base on these factors is to consider the national minimum wage for your age group, how much money is being offered by companies for a similar position in your area and start there. This is exactly what we’ve covered above so around £15 an hour appears to be reasonable when starting out. However, if freelance work is something that you’re going into on a full-time basis you also have to factor in that you are dedicating time to securing your own work and that your work and income will not be steady. Therefore, the final advised figure is £25 an hour.

If I were going into full-time freelance work right away I think I would begin with charging £15 an hour. After around 6 months I would be aiming to hit the £25 an hour mark and have this increase as I develop my skills in the area. If I found that I was not able to secure work at this hourly rate then I think it would be reasonable to go down the employment route for a period of time to develop better skills and a stronger knowledge of the industry. This would help me to target my services and find clients that are willing to pay for specific jobs that I have a level of expertise in.

Summary

It is really good to get a clear outline of what we should be charging as students and junior designers. It can be very difficult to charge people properly for your services. Getting a better understanding of the average statistics for intern and junior design positions makes setting a reasonable hourly rate feel more justifiable. It is also helped by the fact that the minimum wage will shortly be going up to £9.50 an hour and given the money a design student invests in their education alone makes it reasonable to charge more than this. It is also helpful to consider the number of roles you are carrying out when you take on a freelance design job. Personally, I would never have thought about the time I am taking to come up with a strategy for a project or managing a project. Both of these areas should be considered when it comes to writing design proposals and charging for your work. These are areas I will be a lot more aware of if a return to freelancing in the future.

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