How to Determine a Flat Rate for Graphic Design Projects

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The Benefits of Flat Rates

Charging a flat rate for graphic design projects is often a good idea, because both you and your client know the cost from the start. Unless the scope of the project changes, the client doesn’t have to worry about going over budget, and the designer is guaranteed a certain amount.

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Determine Your Hourly Rate

In order to set a flat rate for a project, you must first have an hourly rate. While your hourly rate will partially be determined by what the market can bear, there is a process to follow to help you decide what to charge by the hour. If you do not yet have an hourly rate, follow the steps in How to Determine an Hourly Rate for your Graphic Design Business.

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Estimate the Hours

Once you have determined your hourly rate, it’s time to figure out how long the job will take you to complete. If you have completed similar projects, use them as a starting point and adjust for the details of the project at hand. If you have not, go through each step of the process and estimate how long it will take you, and add them up. Estimating hours may be difficult at first, but over time you will have a lot to compare to. This is why it is very important to track your time carefully.

Remember that a project involves more than just design. Be sure to include activities such as:

  • Design
  • Several rounds of changes (the number of rounds should be in your contract)
  • Client meetings
  • Project research
  • Email and phone communication
  • Dealing with outside vendors such as printers
  • Dealing with subcontractors such as illustrators

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Calculate the Rate for Your Services

To calculate your rate up to this point, multiply the number of hours needed by your hourly rate. Take note of this number, as it is not your final project rate. We still need to look at expenses and any necessary adjustments.

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Add Expenses

Expenses are any additional costs not related directly to your design work or time. Many expenses are fixed rates, and should be included in the rate given to your client. However, you may wish to separate the expenses from your estimate to help the client understand the overall fee. Expenses include:

  • Stock photography and illustration
  • Printing costs, including paper
  • Cost of any materials, such as in package design

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Adjust as Necessary

It would be nice if the process was purely mathematical, but it is not. Often, adjustments need to be made to your rate before presenting to the client. A small percentage can be added, depending on the size and type of project, for unforeseen changes. This is a judgment call for the designer based on the work. Adding a percentage gives you some breathing room to not charge extra for every little new change. As you quote more and more projects, you can look at the hours worked after the fact and determine if you are quoting properly. This will help you decide if adding a percentage is necessary.

Adjustments may also have to be made for the type of work you are doing. For example, logo designs are highly valued, and may be worth more than just the hours needed to complete the work. The number of prints to be made may also affect your price. Finally, the use of the work is very important. An illustration that will be used in a monthly newsletter is worth more to a client more than one being used just once. These terms of use, and their costs, should be discussed with a lawyer and included in your contracts.

Finally, the client may have told you their budget for the project (it is often a good idea to ask). You should still calculate your rate, and then determine if you can complete the job within their budget, or close to it. If you are way over their budget, you may end of losing the job unless you are willing to lower the price to land the job, which can be done either before you meet with the client or during negotiation.

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Once you have determined your flat rate, it is time to present it to the client. Inevitably, some will try to negotiate. Before going into a negotiation, be sure to have two numbers in your head; one is the flat rate, and the other is the lowest cost you are willing to take the job for. In some cases these numbers may be very close, or the same! When negotiating, think about the value of the project to you beyond money. Is it a great portfolio piece? Is there a lot of potential for follow-up work? Does the client have a lot of contacts in your field for possible referrals? While you don’t want to be underpaid and overworked, these factors may determine how much of a percentage you are willing to take off of the price to land the project, if any. As with creating the initial estimate, experience will help you become a better negotiator.