I’ve recently met an very nice guy, an artist (painter) and there’s a painting (good) he did that only take him 30 minutes to make and it cost $2000 and he also have a painting (mediocre) that take 30 hours to make and it tagged at $1000, he said that yes its more time consuming but its not a good painting.
this makes me think that most design related freelancer is charging base on time taken as opposed on the idea-generated will worth. I know we havent produce our idea when we quote our client so we don’t know how much it will worth, and sometimes its not about idea(like rendering and stuff)
Im still a newbie here and havent exposed much on the design industry ‘rate’ system but from what i see that most charge base on the time taken and this makes me think on how should we charge ( I know we are not artist), but hey its just a thought on my head 
what do you think? would really like to hear your thought 
Yes we know the hourly model may sell us short if we create something more valuable than the fee. Many designers talk about using equity or royalties but they have their own pitfalls and difficulties too with a lot of contingencies and legal issues.
One idea I like is to take a partial fee with equity/royalty approach but it is easier said than done. Hourly is not ideal but it is simple to implement contractually which is one reason why it is used in most cases.
take a look at this discussion thread, I think there is some good info in hear on that subject I don’t know how to paste the link in here but you can search the topic title called
“HOW MUCH TO CHARGE?”
wait, here is the link
Your absolutely right, our billing is much more in line with the way a lawyer bills by the hour, but our process tends to be non linear, sometimes it takes an hour to get to the right concept, sometimes a month. Sometimes the fantastic idea we have in an hour we think can not be right, because it came too soon, so we spend a month searching only to end up back at that early concept. Sometime we spend a month and we think this must be the right concept, because we spent a month… and it still isn’t right.
In theory, being somewhat of a meritocracy, we should charge for solutions, not time. This is how your friend the painter is working, it is also how an inventor works. However, it is also very difficult to find the solution with that amount of financial pressure. In the end, we estimate how many hours we think it will take. If you are experienced and good at estimating, and you know your team, you can get within 10% + or minus… 20% is still a lot of room for error… it is an art as well as a science.
My preferred way to charge is a bulk rate. I show how many hours it will take to complete. I break down what the hours mean like what sketching is equal to pre-hour so forth for all the other aspects. Then I work up a fixed price from the (sum of the hours multiplied by the rate).
I like this method I can over estimate a little and actually come out head on my hourly rate if I finish faster. The pit fall is of course if you get it wrong you will be losing money and time. But most people seem to be quite happy with this method of billing it makes the business know exactly what they will owe you. Having something concert like that in a nonlinear profession really helps fit into a corporate setup. I also like it because I can then ask for half of that price up front with out having to do any work. Then the rest on complication of the project.
Bingo!
Project fees are the way to go… build enough room in there to give it some serious design thinking that you know will be enough time to generate a good idea. If the idea comes in 10 mins and you quoted 4 hrs… bonus, you win. It’s all about the value to the client at the end of the day, not the value of your time per hour.
There’s an interesting risk management concept, in which you base your final estimate on two preliminary estimates: the typical case and the worst case. It goes like this:
-
Never estimate your best case to do anything. For instance, if you think you can generate a solution and present it in 40 hours, but that 40 hours is contingent on every possible thing going as right as possible, 40 hours isn’t a useful number. Experience tells us something in that 40 hours will take a lot longer than we think.
-
The typical case. Estimate what you think it will take to arrive at a solution under normal conditions most of the time. Maybe you come up with 60 hours.
-
The worst case. Estimate how long it could take to arrive at that solution if the things you could foresee causing problems do occur. Maybe this means the client gets indecisive, or changes evaluation criteria, or part of the problem is more vexing than you expected it to be. This number might be 150 hours.
-
Take 1/3 of the difference between worst case and typical case, and add it to typical case. The idea is that 2/3 of the time everything will go off as expected, but 1/3 of the time you will hit the worst case - you just don’t know when exactly. So in our example, [(150-60)/3]+60 = 90 hours. That is what you should quote.
If you consistently quote this way, some projects will go over and some will be under. Over time, your realization will improve, as you are no longer eating your client’s risk.
Since your artist friend is not providing business services, his pricing methods don’t really apply to design work. I think in design you need to set up your contract so payment is based on performing the work requested at a professional level (meaning you did your due diligence within the time allowed) and letting the client assume risk for the outcome. There are too many nondesign factors (things you aren’t responsible for) at play on any project that you can’t base your billing on how “successful” your solution is.
Haven’t check on this thread for a long time, thanks for all the answers 
Bcpid, that is an excellent answer.