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:
- 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
5. 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
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.
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.