Neil Tortorella is a veteran graphic designer with
over 25 years' experience in developing identities,
collateral and web solutions for both large and small
companies. Based in Northeast Ohio, Tortorella Design
has received numerous awards for design excellence.
Coming up with a fee for a logo
can be an exercise in anxiety for new designers and seasoned
pros, as well. How much should I charge? What if I charge too
little and the company takes off with stellar success? Am I
cutting my own throat? Oh geez, I'm competing against four other
designers. Is my estimate too high? Too low? Where the heck
did I put the antacid? We've all been there. Many of us have
even taken up residence.
Logos and identity programs - especially for startups - are
tough because of all the unknowns. Will the mark I create end
up being plastered all over the planet in a few years? Here's
an email I received recently from a UK design student. What
follows is my answer to her query.
"I am sort of confused on how to deal with a future client of
mine. I am a graphic design major and am trying to get into
the field so that I can get some experience before I graduate
next year.
I just happened to tell one of my coworkers that I am trying
to get started doing some freelance work. He told me his mom
needed a logo for her up and coming fragrance business. I have
never done a paying job before for my designs, but I feel that
I have to get started sometime, and know how the business works.
He asked me how much I would charge to design the mark. From
the top of my head I said that it depended on what she wants
and a few other things. I hate to estimate too high and lose
the project to someone else. But then again, I would hate to
charge too little and then have her expect me to do other work
in that same price range.
But since this is my first job, should I do it for free?
But what if the business does really well and I get no credit
for my contribution?
I also read a lot that contracts and percentage deposits are
very important and typical, but I don't know what should be
included in a contract, or the percentage I should ask for before
starting work.
I would very much appreciate if you would share the procedures
to go through, to make this job run smoothly."
First off, you shouldn't do it for free. Even though you're
still a student, you're work is worth something and the logo
will become a valuable branding asset to your client. How valuable
depends on how successful her company becomes.
That said, the "something" becomes a bit tricky. I've been at
this for over 30 years and I still need to consider price vs.
competition vs. client budgets vs. valuation and a myriad of
other factors. Working out a fee for a logo can be more art
than science.
The ideal thing is to turn the tables and ask the client what
budget range is comfortable for them. It's the smartest path
and most clients understand this. They set a cap they're happy
with that won't break the bank. You know where you stand and
how much time you can put into the design.
If they're coy about sharing their budget, you might want to
think twice about taking on the project. The designer/client
relationship requires trust. We don't deal in commodity items
or hard goods. So, saying things like, "logos for 100 bucks"
don't really make sense. Each client is different. Each project
is different. In my experience, the clients that choose to be
clandestine are the toughest and usually problematic.
I often liken graphic design to building a house. You can build
a huge thing or a wee little cottage. It all depends on how
much you've got to spend. I explain to my clients that I can
design and design and design, spending loads of hours in research
and tweaking this, trying that. When I've got a budget range,
I know the limitations.
Next, you'll want to insure that you at least cover your time
and expenses. If you haven't done so already, take a peek
at
my article, "How Do You Rate?" You can find it here.
The three factors in figuring a logo project are:
1. Cover your time
2. Cover your costs
3. Cover the valuation factor
Let's say you've got a small client with a budget of $1000 US
and your rate is $50/hr. You know you've got 20 hours to tinker.
Or do you? Well, you've got to buy, let's say, a reference book
of logo designs from the 1920s because something Deco might
be just perfect - 20 bucks. You need to shell out some dough
for presentation boards for show and tell - 15 clams. Your inkjet
printer stinks, so you need high-quality printouts from the
local copy shop for the preliminaries and final comps - another
15 smackers (you've got a coupon!). Your project related expenses
come to a whopping $50. That drops your tinker time down to
19 hours ($950). Not a big change, but you've insured your expenses
are covered. You don't want to become a bank for your client
and whittle away at your slice of the pie.
I find "backout" budgeting works well at this point. You've
got 19 hours to play with, after expenses. So, you start with
the end of the project and work backwards.
You figure final production's going to take you about 5 hours
to create various file formats, printouts, draft the logo standards
and stuff. 14 hours left. Ut oh! We're starting to sweat.
You'll need time to painstakingly craft the selected logo design,
tweak it, adjust colors, test it across a range of sizes for
readability, tweak it some more, mount it to board for presentation,
etc. Estimated time? Let's say 6 hours.
So, now you've got 8 hours left. Can you do it? Well, it's going
to be tight. Figure in a couple of hours of meeting time and
you're down to 6 hours for research AND preliminary design.
That's probably not enough time to do a bang up job, so something
has to give and we haven't even talked about legal stuff like
trademark searches. Can you cut your design options and present
less? Forget buying the book and do less printouts to save a
few shekels? Prepare fewer final file formats and forget the
logo standards (not a good idea)? Do less research? The thing
is to reduce expenses and services, not your rate.
Beyond this is the valuation factor. Logos are business assets
that build equity over time. For a small mom & pop shop, that
serves a local market, that value probably isn't going to be
as much as the future value of a logo for a startup company
with a great product, solid business plan, investment capital
coming out their corporate ears and potential customers chomping
at the bit.
The valuation factor is your compensation for that future value.
Coming up with a number can be a bit of design clairvoyance,
but typically it depends on where you see the logo's use and
value down the road and how much you think that's worth. It
also can become a negotiating tool.
Okay, that was all just the prep work to answer your question.
Whew! I'm tired now! The reason I chose a $1000 budget and a
$50 hourly rate (aside from dividing nicely) was to show that
a grand for a logo - even for a small operation - isn't all
that much. We ran out of time and money pretty quick and didn't
even get to that valuation factor. So what should you charge?
You're still a student, so your rate isn't going to be as high
as somebody with Methuselah's years of experience. Run the numbers
shown in my "How do you rate" article. Odds are, you'll come
out at something like $25 - $35/hour based on an entry level
target salary and minimal overhead. From there, figure the amount
of time you think you'll need to complete the project if you
can't get a budget figure from the client. Add 20% to your estimated
time. Everything takes longer than you think - especially when
you're just starting out. Figure in your project costs. Consider
the future value and - Voila!
Piece of cake, right? Don't forget to bring a pillow or two
with you to your client meeting. They help when the client falls
over backwards. Seriously, a logo fee for a small to medium
sized company can easily range from $2000 - $10,000 US. The
Graphic Artists Guild's Handbook of Pricing and Ethical Guidelines
(10th ed.) estimates a logo fee range of $5,000 - $12,000 for
companies with revenues under $1 million.
Consider this. In 1971, Oregon University student, Carolyn Davidson,
designed the now famous Nike logo - a stylized wing, a.k.a.
"the swoosh." Her fee? $35. We've all heard that little horror
story of underestimating. The point here is we don't know what
the future holds. It's important to see our work as the creation
of a huge business asset for our clients. It is, quite literally,
their face before the public. In the case of Nike, a simple
symbol, a great tagline, along with some select endorsements
from various athletic superstars, resulted in a stellar brand.
"Just do it!" became not just a tagline, but the battle cry
of a generation. What's that worth?
It's important to note, because we don't hear it often, that
in 1983 Ms. Davidson received a gold and diamond "swoosh" ring
in recognition of her design. Oh, and she also received a nifty,
suitable for framing certificate ... and an undisclosed amount
of Nike stock. You might not be so lucky.
Time and money are big considerations in the field of logo design.
There must be enough time to do the research and explore the
design options. There must be a large enough budget to fund
that time investment and provide compensation for the true value
of the finished mark. Renowned designer, Primo Angeli, once
said, "... time and money. Without them, design is mere decoration.
Neither good design nor fine art." Words to live by.
