If you missed Part 1 of this article, click here!
Finding Your Hourly Rate
We established that the baseline should be $50 an hour, but how much should you charge given your particular experience level and living circumstances? If you’re a full-time freelancer, you need to consider how many hours a week you dedicate to client work vs. personal business administration, such as managing invoices, contract negotiations, and portfolio upkeep. Those numbers add up, so realistically, a full-time job of 40 hours a week may be closer to 25-30 hours of billable hours dedicated to client work.
A freelancer must also consider the cost of living factors including healthcare, rent, utilities, food, child care, supplies, and software subscriptions. Your hourly rate must be high enough to cover these expenses and ideally account for lulls in client work. Calculators such as Beewits’s freelance calculator or the broader Freelance Nomads calculator take your unique factors into consideration to develop an hourly rate.
Typographer and designer Jessica Hische recommends developing a scale for your hourly rates. The bottom of the scale is the absolute lowest amount you can charge and still cover all of your monthly necessities. The upper range is a “dream salary.” Perhaps you want more vacation days and extra spending money. You can create a goal salary that bookends the upper bracket of your hourly rate. Between these two numbers sits your ideal hourly rate, which you can use to calculate project rates.
The baseline hourly rate ✕ number of hours approach to pricing is great for personal commissions but is not the most effective way to charge for commercial clients. Large clients that have larger budgets use artwork in conjunction with their brand to enhance their products. Therefore, the cost of the art should increase as the importance and size of the audience increases.
Licensing
By default, the creator of the artwork retains the copyright but can license their creation to a client for a period of time. Often, contracts will set up “exclusivity periods,” which are lengths of time in which the client is the only entity that can use the work. At the end of these periods, the freelancer reclaims full rights to the artwork, which can include licensing it to another company, selling it as a print, etc.
Sometimes these license deals can be limited to a couple of months. Sometimes they can last years. Sometimes, the client will want to completely own the work and buy the copyright from you (this can be referred to as “work for hire” or a “full buyout”) and means that you should definitely hike up the price. Full buyouts are common in branding where a client needs to own something like a wordmark, the client wants to be able to edit or use the work in a variety of mediums, or own exclusive rights to display the work. In short, longer licensing periods equate to higher fees.
Jessica Hische, American lettering artist, illustrator, author, and type designer. (Photo by Helena Price)
I once again refer to pricing wizard Jessica Hische on her take to handling licenses: artists can create an art-making fee and a licensing fee. The first fee solely covers the cost of making the commissioned image. The second fee can be adjusted based on the usage and the size of the client.
For instance, let’s say two different organizations want a menu designed for their spring offerings. One of them is a local mom-and-pop establishment and the other is a national restaurant franchise. They both have the same needs, but it would be unfair to charge a small restaurant the same price you would charge a national chain, and vice versa. Here’s where Hische recommends using multipliers to determine the licensing costs. If the scope of work comes out to ~20 hours of work. For the small restaurant, you may quote the creation price using your personal lower rate; say $60/ hour for a making fee of $1200. For the larger restaurant, you may use an upper bracket price of $90 an hour to establish an $1800 estimate. For the small restaurant, you may use a license fee equal to half of the making fee, making the total $1800 for use of the menu design for the spring season. For the larger chain, the broader distribution of the work at a national level can warrant a 4 or 5× multiplier on the making fee to bring the cost upwards of $7,200.
Misc. Pricing Factors
Rush jobs should also incur an additional fee to account for the strain it puts on your schedule. It’s up to the freelancer’s discretion to judge whether a deadline is rushed based on the scope of work. Typically, it’s best to tack on an additional 10-20% of the project cost to accommodate the last-minute needs.
Illustrator and instructor Matt Rota teaches his students that there are rare instances where working for free translates into worthwhile exchanges. While many artists are offered bad deals for art in exchange for “exposure” on social media, sometimes it’s worth working for free if it means belonging to an anthology with an artist you admire or doing work for a non-profit you align with. Knowing your worth means you can assess these situations and decide what projects are worth it.
Pricing for Friends and Family
For many artists just starting out, clients come from friends and family through word of mouth. It may feel immoral charging Grandma your full rate for a commission of her beloved cat. One strategy, recommended to me by illustrator and children’s book author, John Hendrix, is to slap a friends and family discount on your work after pricing the project normally. This can range anywhere from 15 – 40%, but it shows the client the true value of your time while establishing yourself as a professional.
Even industry veterans constantly confer with one another to ask how to price a project. Over time, pricing becomes easier as you develop a “gut feeling” for what feels like the right number to pitch.
Do you have any further questions as an illustrator? What is best for you when pricing? Comment below!
