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Figure if you are a freelancer, you’ll only be able to bill 1100 to 1300 hours a year.
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At your level (2 years out), you should not be earning less than $45k.
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Add 6.2% to the $45k (or whatever appropriate salary you have set) to cover additional taxes you will need to pay as you are self-employed.
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Figure out annual software expenses - CS, 3d software, and rendering software.
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How much of your living space is devoted to work? This is your monthly workspace rental.
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Other expenses.
Once you have all of these things itemized, divide them by 1200 (hours), and that’s your minimum hourly rate. Add another 20% to cover everything you forgot about.
You’re welcome. You should end up between $60 and $80 by this formula depending on local conditions. Arguably, there can be an additional markup to mitigate the risks associated with conducting business - aka sometimes clients don’t pay promptly or at all. That can add another 20 - 50% on top.
Do most firms like Frog, IDEO, Lunar, etc. charge hourly rate? If so what’s the rate, does anyone know?
I am guessing they make an “estimate” for the proposal of what they think the total fees would be but then go actual hourly rate right?
I’ve been doing a lot of fixed fee gigs cause my clients are small-fry companies. This is to my own peril cause I usually spend way more in hours than I had originally planned. Most of the time it’s the client who adds things along the way…like “oh I need a logo” for free or I just thought up a new feature we want to add, or we changed the PCB so now certain things need to change. But when I ask for more pay they usually get upset saying I agreed to do this on a fixed budget. Barf!@%#
I figure anywhere in the US$100 - US$125 per hour range is about right if you have decent experience as a freelancer. It’s more if you run a company and have other overhead. I see a lot of low ball freelancers out there but they usually do not have real products in the market and just pretty pictures or renderings.
Yes, design consultanices do charge by an hourly rate. I know what the place I work for charges out at and I would expect Frog etc. to be charging out AT LEAST $200p/h
Fixed versus time and materials is very company by company. In general, you’ll encounter a lot more fixed fee work, especially in RFQ/RFP situations. Think of it this way - if you can’t establish expectations for what your client should expect to pay, how long your work will take, etc, why would they even consider writing you a blank check for time and materials???
Ideally, you want to structure your project according to critical client milestones that require signoff. Set up your proposal so you have an opportunity to re-scope/re-quote at these milestones. Make it very clear what deliverables you will be providing (and not providing), and what kind of feedback is required from the client.
When there is scope creep, ask the client “should I invoice that separately?” It’s called change management. As long as you clearly define inputs and outputs in your proposal, and you are diligent about not giving away freebies, you won’t put in a ton of extra hours doing things for free. Remember, lawyers don’t work unless someone is paying them. You are the same.
Do you have an original design there? Maybe worth more than the cost for plans to replicate it. Royalties?
wow, congrats anyway, How did they find you?
I’m curious what guys like Karim Rashid, Marc Newson, Naoto Fukasawa, Julian Brown, Starck etc. charge or how they strucutre their contracts. Would it be different from a firm like Frog, IDEO, or Lunar?
How and what to charge seems to be the perennial design question that keeps coming up.
Some say hourly, some say fixed, some say fixed with some royalties, etc…
One thing I have found is that almost all clients say they want “Apple” level design yet when it comes to paying to get that level of design and results they say they don’t want to pay that much and when it comes to schedule it’s always yesterday.
I get clients who say I want Apple design and lookand feel. Then when I show them soutions that would produce that level of fit and finish, they say “that’s too expensive”. Funny. I like to tell them Apple probably pays a quarter mil to staff IDers and millions to their head honcho not to mention the zillions in development support and equipment to get their results and here my clients are wanting that for a few grand. Hillarious.
Apple probably also has a really nice prototyping facility to prove designs out in-house and work details out. This takes bucks to keep going and staffed.
Can we somehow get core77 to do a survey of what freelancers are charging (and getting) these days. Ask what their experience is, specialty, percentage of jobs they are seeking outside their specialty (i.e. someone may have a lot of exhibit design, but is doing a lot of drafting jobs now), percentage of jobs gotten vs. bids submitted, anything anyone else can think of that would be helpful for independent ID freelancers to know.
I think we need to unionize. IDers of the world unite!!!
Unions are for people who can’t pull their own weight. You won’t get me on board.
R
The unionized model of musicians and actors getting paid royalties for sales on their creative output seems better than the system and attitude we designers have in place as a group.
The problem is that we need to get all ID’ers on board with what good business practices, rates, basic contracts elements, etc. are - a good, workable baseline. Now, this information has to be hobbled together from so many sources, and the “Business and Legal Forms for ID’ers” is too onerous and formal, stuff from the AIGA doesn’t apply and is too detailed and formal too. Don’t think ISDA publishes anything like this.
There are too many talented people selling their services for low sums and unknowingly being taken advantage of in other ways, this makes it harder to practice for the whole group. I will be the first to admit to admit I’ve made mistakes too, it would be nice to go to one place to refer to a list of “BEST PRACTICES” and realistic rates so ID freelancers have a baseline.
Unions would be challenging given the extremely wide net cast by “design.”
That said, as a rule, none of these kids starting out should accept work offers under $20/hr or so (more on the high COL coasts), especially if the benefits are weak. If the offer is from an employer that expects 50-60 hour weeks and the employee’s firstborn, that’s 50 or 60 x $20/hr per week minimum. Freelancers, as a rule, probably shouldn’t be charging less than $75/hr at the bottom end (more on the coasts). Design sells billions of dollars worth of goods. Be a mercenary when it comes to getting your cut.
I mean, I was just looking at the 2nd ad looking for an IDer for a NYC ad agency that wants some custom screen fixtures made out of piping, they want to pay $15/hr with a max budget for $600 including materials. So, they must of gotten bids they thought were too high from the first ad they placed (which was similar but did not list budget). I mean come on 15/hr? I guess they’ll find someone willing to go for it just to get on a client list and a professional project under their belt. Or you play the game where you submit a quote of what is really realistic and go back and forth.
That’s fabrication. Not design.
R
Does the R stand for republican?
Absolutely not. All politics aside. Of you can, do. If not, complain.
R
So IDers should charge a different rate for different services? For example, $75/hr for design, $15/hr for fabrication,
$ 20/hr for drafting and not expect to be able to charge one rate for any of the typical services that come under Industrial Design?
Design isn’t all things. Fabrication, CAD, etc. isn’t design per se at the same rate. Didn’t we already cover this in a previous thread?
R
Is it? When most musicians are complaining about royalties and the music industry is tanking? I’d rather have upfront $ than take a flier on most projects that are most likely doomed to failure in a competitive market where my contribution is only a small % of the overall success of a product…
R