Transcripts
1. Introduction: Hi, my name is Jesse LeDoux. I'm an art director, illustrator, designer, living in Seattle, Washington. My previous classes have been on the fun end of the spectrum, things like posters and character design, and now it's time to shift to the not so fun end of the spectrum and talk about pricing your work and negotiating with clients. I have over 20 years of experience working with clients, both big and small. The small ones you've never heard of, and the big ones are folks like Disney, Starbucks, Target, Amazon, Facebook, Nike. They're all important and the way you deal with them, regardless of whether they're big or small, is essentially the same. If you're a creative freelancer, just starting out or wondering how to handle your creative business a little better, this class is for you. This class will give you a framework on how to price your work, starting with your first reply back to the client, ways to price your work, your terms for the project, and finally, wrapping up the project and sending your final invoice. What we won't get into are the final numbers because those vary greatly by client, and project, and your skill, skill level, and where you are in your career. However, this class will provide a framework from which you can find a number that's both mutually fair for yourself and the client. Talking about money is hard, but hopefully, this class makes it a little easier.
2. Initial Reply to Client: You've just received an email from a potential client. Congratulations. The hardest part is done. Now it's time to respond. The first thing you're going to want to do is thank them. They could have chosen anybody in the world and they chose you, and that should never be forgotten. The second thing to ask them about is their timeline. You have your projects, they have theirs. You need to make sure that their scope for the project fits within your schedule. The third thing you are going to want to do is ask them if they have any ideas or direction for the art. This will help fish out whether it's a good project or whether it's going to be riddled with red flags. If they have a pretty clear direction and it aligns with your body of work, then it will probably be a pretty fun and straightforward project, if they don't have a large idea. But it seems they will be heavy handed with the art. That will that's a big red flag. You'll want to consider whether you want to take the project on or not. The fourth thing you are going to want to do is ask them who the contact person will be. If they don't have one clear, concise person, it probably means there will be several cooks in the kitchen. I've been in situations where I've been doing a record cover for our band. All of the band members have input, and it turns into a crazy can of worms where the drummer will have one idea, the guitarists will have another idea and the singer will have even another idea. It just creates more work and chaos and mess to the project. If you have one concise contact person that you'll be dealing with throughout the entire project. It will be much easier and much more enjoyable to work on.The last thing you're going to want to do is ask them about their budget. A lot of times clients have budgets already in mind. knowing that will save a lot of work in the negotiation process.
3. Negotiating: Now it's time to talk about pricing. There are several ways you can do it. The first is with a flat fee, where it doesn't matter whether you take an hour to work on it or 5,000 hours to work on it. You get the same price for the project. The second is hourly, and this is where you assign an amount for each hour you work on it and keep track of the hours that you spent working on this project and multiply that by the hourly rate that you had agreed on. The third is a royalty situation where you would get a percentage of whatever the money is that they make off of the project. This really only makes sense when there's something tangible that's being sold. Then the final thing is something creative. Working for beer, working for a part of the run of whatever the product is or whatever you want to do. Trade bartering for goods or services. I typically go flat fee just because that way I'm able to work efficiently and there are no surprises when it comes time to send the invoice. Hourly can get a little messy if something just ends up taking way longer, whereas with a flat fee for me, there are no surprises at the end and I like that. That way both myself and the client knows what we're getting into.
4. If the Client Has a Budget: If you remember in that initial e-mail that you responded to the client, you asked if they had a budget. From here we're going to split it into two different parts. If they do have a budget, then we'll talk about that first and if they're asking you for the budget, we'll address that next. So first off, if they did come back with a budget, here are some things to consider. The first, how long do you think it'll take to complete the work? It's helpful to, in your mind, ballpark the amount of hours that you feel it will take to complete this, assess an hourly rate, and then do that math and make sure that the budget that they're suggesting will make sense for you. The second is how and where will the work be used? If it's a tiny little spot illustration in a magazine, then you might not be able to charge nearly as much as if it were blown up on a billboard someplace or blowing up into some large campaign. So understanding where and how the work will be used will affect how much you can reasonably charge for it. The third thing is, will they want to own the rights? I try to keep the rights to my artwork as much as possible. If in any agreement or anything it's stated as work for hire, that means that the client will own the artwork and there will be drastic limitations in your ability to use that, sometimes you can't even put it in your portfolio. So that's something to consider. I again, always try to to own the artwork and if somebody wants to do a work for hire or do a full buyout than I typically charge twice as much, if not three times as much for them to own that artwork because once they own the artwork, they can use it however they want. The fourth thing to consider is how large is the company or the client? If it's somebody small, then just typically they're less hoops to jump through. Whereas if it's a big company, like Nike or Disney or someone, there are levels of approval that the work will need to go through and because of that, there will be more revisions and it will just be a lot more work for you to do. So I typically, if it's a larger company, all charge double what I typically would for a smaller client because you're going to end up doing twice the amount of work even though on paper it seems like, "Oh, It's a small little project and I won't need to do too much." You're going to do a lot more work on it than you think you will upfront. So if you're charging a flat fee especially, make sure that you build that into your price. Another thing to consider is how many rounds of revision are you willing to do? I frequently do three sketched rounds and then two final rounds. In the sketch round, it's black and white pencil sketches and those are focused on the composition, on the content, on basically the concept of whatever it is I'm working on. Once that gets approved, then I'll go into what I call final and at that point, it's the fine tuning of things. It's color palette, it's maybe typography, it's the things that you can change a lot easier. At that point, composition is fully locked in and there's no going back on that at that point. The sixth, will the project require supplies above and beyond a reasonable amount? This means you have your tools that you work with every day, it could be pens and pencils and paper, or it could be your computer, iPad, whatever. But if this is a mirror or something where you're going to be buying paint or different brushes or things outside of what you typically do, that's something to consider. Lastly, if it sounds like a fun project, but it's not quite enough money, go ahead and ask for more. You need to feel you're properly compensated for this project. Because if you're not, it's going to be in the back of your head and you're not going to do your best job possible. So ask for what you feel is fair at the start, even if they have a budget, sometimes they can move on that budget if they want you bad enough. You also have to be prepared for them to walk away if they're not willing to go any higher. That's a risk that you're going to have to take, but sometimes it can pay off. So always consider that.
5. If the Client Does Not Have a Budget: If the client doesn't have a budget in mind, your approach is largely the same, except you just need to do a little more legwork in figuring out what that price should be. To start with, figure out what your hourly rate would be. It doesn't matter whether you're doing a flat fee or an hourly rate, it's still helpful to figure out what that hourly rate would be. Remember, you're valuable, don't sell yourself short. Even if you're just starting out, you're going to want to make sure that you're charging enough to pay for all of your expenses. If you're working at an office, you're not having to pay for your computer or your office space or electricity or any of that stuff so make sure that you're taking that into account when you're coming up with your rate. Once you've figured out what your hourly rate will be, then think about how long it'll take you to complete your project. If the client is a large company, it's probably going to take one and a half times to double the amount of time necessary to complete the project just because they're layers of hierarchy that you'll have to cut through when working with them. If you're working with an agency, process is typically a little more streamline, but remember that there's more cooks in the kitchen. Not only do you have your agency that you're answering to, but then the agency is answering to the client, so there's a lot more opinions at play in the process. There's also a larger chance of your project getting killed when you're working with an agency. The agency maybe happy with the end result, but the client may not be, and things get killed pretty easily that way. Another thing to consider is who will own the rights to the work, is it explicitly stated in an agreement that the work is a work for hire because if so, that means that you will not own the rights to your work and you will want to price your work accordingly. I typically double my price when it's a work for hire or when they want to own the rights because then I lose control of how my work is going to be used and you have the potential to miss out on other potential money through that same work. For instance, say the client hires you to do a T-shirt design. If it's a work for hire and they own the rights to that artwork, after you create the T-shirt design, they can throw it on mugs, they can use it on a billboard, they can use it wherever. Whereas if you own the rights and you only give them the permission to use that artwork on the T-shirt, then you can charge them again to use it on a mug or on a billboard or other applications. You're also going to want to establish how many rounds of revisions you will do for that stated price.
6. In Either Case: Regardless of whether the client has a budget in mind or not, there are some other things that you're going to want to consider. The first is don't work for exposure, work for some compensation, preferably money but if you want to do something for trade then that's great too. Exposure very rarely pays off and when you're working for money, you're still going to get exposure, so try to work for some sort of actual compensation. Request 50 percent upfront with the remainder due upon completion of the project. This way, if the client decides to go in a different direction, you have withheld some money and you can use that as a kill fee. To a lot of people outside of the design world, kill fees are a foreign concept and it's good for them to be aware of what it is and how it is used and why it is there. It protects you and it also gives them an out from having to go ahead with something that if through the course of working on the project they're not comfortable with, it gives them an out to go in a different direction. You're also going to want to ask for samples. Not only is it nice if you want to send them out for an awards competition or show, but they're good to just have for later reference or if you want to shoot them for your portfolio. Remember, the most powerful business card you have is your past work.
7. Money Isn't the Only Thing to Negotiate: As you're negotiating the price, it's also helpful to establish the terms of the work. This can either be in the form of the signed agreement at the absolute least, or an e-mail laying out what you can mutually expect. If you discuss terms via the telephone, always follow up with an e-mail. You will want everything in writing, not only in the event that things get ugly, but also to simply remind yourself of what you agreed on if you want to reference it later. Sometimes projects take several months, memory fades and it's nice to have the written record of what you had initially agreed on. Somethings you're going to want to highlight are: the scope of work, a compensation, the rounds of revisions. With rounds of revisions, I break this into a sketch phase and a final phase. Typically my sketch phase, I do three rounds of sketches and these are pencil sketches and this is where, I deal with composition, content, and the overall concept of the piece. Once that gets locked in, once I go through up to three rounds of figuring out what the end result will look like and just in pencil format. Then I take that to color and finally inking and color. On the final round, that is where I deal with the more detail oriented things such as the color palette and the type. If there are supporting type, print typically headline type, I will work into the sketch phase because that's pretty important. But, supporting type is something that I deal with, in the final round. In your agreement, you'll also want to highlight the design deposit, you'll want to discuss the timeline. Lastly, you'll want to discuss the deliverables. Do they want an Illustrator file? Do they want flat JPEG? Is it original artwork that they want? All of that should also be discussed just so that when you are working on the project, you know what you will be delivering in the end.
8. Moving Forward: Once you have agreed on the price and terms of the project, adhere to it. It doesn't matter if the project takes longer than you would expect it. Don't try to renegotiate the price. It's bad form, it makes you look bad, and it creates weirdness with your client. Use it as a learning lesson. Conversely, if the client is loving how things are coming along, and they either want you to do extra work or they want you to use your work in more places than originally agreed, it's entirely reasonable for you to ask for more money and they should pay you more money because it's going outside of the original scope of work. At the end of the day, both you and the client should feel good about the project.
9. Invoicing: Finally, when you're done with the project, you're going to want to invoice. I know this is pretty basic information, but if you ever want to get paid, make sure you send an invoice. Some things to include on your invoice are your name, your address, your contact info, the date that the invoice was created, the client name, and name of the contact person that you have been working with, what exactly the project is, the price, any additional phase like taxes, and shipping, and anything like that, then also the terms of the invoice like how quickly you want to get paid. Once you have all that, send it off to the client and get to work on your next project.
10. Conclusion: In conclusion, the goal of negotiating prices in terms of your client is to find something that is fair for both you and them. You are in this together. I've shown you what works for me, but I encourage you to experiment and find strategies that work for you and your work. Everybody is different and approaches can change and what works for one person may not work for the next person. I also encourage you to use the community section to share what works and what doesn't work for you. We're all in this together and the more we can share, the more we can all benefit from each other's collective experiences. Thanks for listening to me rumble on about this and best of luck with your future negotiations. [MUSIC]
