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Logo design is a staple for many graphic designers. But figuring out how much to charge for them can be a lesson in angst and anxiety. Thoughts spin around in many a designer’s brain. “Is my fee too low? Too high? What happens if this client grows up to become a mega-brand? Am I slitting my throat? Will I regret things down the road?” The questions go on and on. By comparison, brochures and other printed material are pretty easy. You usually know how many will be printed, what the distribution area will be, the physical dimensions, number of pages, etc. of the piece.

So, its load is easier to figure out a fee. Logos, on the other hand, are dodgy, especially if you’re working with a start-up company. They may grow to become a huge company and your design might end up all over the place. Or, the client may end up staying small and local. Unless you happen to be clairvoyant, there’s really no way to tell. And therein lies much of the pricing quandary.

Many clients will ask something like, “Hey, I need a logo for my new company. How much will that cost?” But, 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. Design isn’t an off the shelf type of thing. So, saying things like, “logos for 100 bucks” doesn’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.

First, you’ll want to ensure that you at least cover your time and expenses. This is where knowing your hourly rate is important. Sure, you’ll give the client a number for the entire project, but you need to know your real hourly rate to figure your time and how much that costs. It’s the bottom line number that you can’t go below.

If you’re using the “going rate,” or simply pulling numbers out of the air, I suggest you read my article, How Do You Rate: Figuring your real hourly rate. The thing is, every designer’s situation is different. Overhead, target salary or draw and associated expenses need to be addressed when calculating an hourly rate. The “going rate” may or may not be right for you and there’s a very real chance that it can be too low given your situation.

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 – another 15 clams. Your inkjet printer stinks, so you need high-quality printouts from the local copy shop for the preliminaries and final comps – there’s another 15 bucks. 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 ensured 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 fee.

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 start-up 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?

If you’re still a student, 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 at least 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. My [grossly outdated] copy of 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 very 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.

Illustrations:

Coca-Cola-Logo.jpg
Coca Cola: $0

Twitter.png

Twitter-logo-alternate.jpg
Twitter: $15
(some say between $2 and $6 – It was bought on iStock)

google-logo.jpg
Google: $0

pepsi-logo.png
Pepsi: $1,000,000

bp-logo.png
BP: $211,000,000

logo-bbc.jpg
BBC: $1,800,000

Source: Mashable.com

What also needs to be considered for the high priced logos in the scope of the project. Often there’s much more than just the design. It can include market research, focus groups, trademark searches and other legal work, applying the mark to signage, literature, etc.

Poll Questions:







FYI – This poll closes at midnight Pacific Time on September 23rd. The results of the poll will remain hidden until then so we can reveal the results in a follow up post early next week! Thanks for voting and all your comments!