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Figuring out how much to charge

How much to charge? That is the question.

Why is it so hard to charge for our art or creative services? I’ll tell you why, it is difficult because we are are timid, scared, and deep down inside we feel that we are impostors. What we created is not worth as much money as we are told we could charge. Do you believe this? I hope you don’t, because this is a lie. It is difficult to believe that we can make money from what we create. Especially when what we create is so easy for us to make.  Don’t dismay, help is on the way!

I am going to show you a mathematical way of thinking that takes away “emotion,” thus, freeing you from fear, and help you calculate how much you should charge for your creations. But first, get yourself a notebook, pen and a calculator, and consider the following:

  1. The value of your work
  2. Your hourly rate
  3. Salary and overhead


The value of your work

You are not selling your time. What you are selling is your brain, your attention to details, your ideas, your imagination, your skill. It is very important to understand that value comes from service. Not what you thought, uh? The truth is that whatever your craft is, you are  probably not the only one selling this particular craft. Some clients may even think that they can do it themselves. You have competitor all around you, and their prices are up and down the scale. There will always be someone who charges less than you do. you must understand what value you add, and use that for your craft. What will make you stand apart? costumer service. Your attention to details. People buy what they “perceive” to be of value.

Take websites for example. You visit a website where they sell hand made tennis shoes. They are beautiful, one of a kind, and the best tennis shoes ever made in the world. HOWEVER, their website is horrible, the ugliest! The value perceived here is low and this seller cannot be trusted. Then you visit Nike’s website. Their shoes are not hand made, but their website makes you salivate for every shoe they have. You are willing to pay big cash for those Jordans. their perceived value is high, therefore you can trust it. See what I mean?

Your Hourly Rate

Most creative people figure out an hourly rate from thin air. In order to run a profitable and healthy business, you need to know how long it takes you to create your work– yours and whomever else is helping you. You need to know your expenses, and time is a valuable expense. When we just begin, we simply guess and make tons of mistakes–and that is good. You should track the time you spend on on your art from beginning to end. As a graphic designer, I use an app called “hours Tracker”. There are many “time tracking apps”, so find one that works well with you.  Your hourly rate is not your price, it is only part of your building blocks for pricing, but this is just internal. Your clients do not need to know this.

Salary and Overhead

The bottom line is that you should know how much you must charge, which is different for how much you should charge. Take into consideration your competition and how much they charge. in addition to your rate there are other things to consider, salary and overhead. Many creatives do not include their salary into their expenses. They see their salary as the money they take out of the business. There are many expenses for your craft, such as materials, marketing, professional fees, software fees, etc.. Profit is what your business gets after all the expenses are paid, and your salary is part of the business expenses.

Ok, now, let figure out how much to charge.
Take a deep breath and bring your calculator, pen and paper.

Step 1, determine your salary. How much? it’s up to you. what is the salary you need your business to pay you before taxes? How about we use the example of $45,000/year. Now add 30% for taxes, That would be $13,500. so, $45,000 + $13,500 = $58,500. <— This amount is what you need to pull from your business per year in order to get your craved salary.

Step 2, Figure your hourly rate. How much money you make every hour your work on your craft. Think “in a year”. 1,142 hours is based on a 40 hours per week minus sick days, travel, laziness, LOL. Or if you will only work part time, figure out how many hours a day, then weekly, then monthly, and finally per year. To calculate your hourly rate, take the total salary you need, in this case $58,500 and divide it by 1,142 hours (or the part time hours you calculated). This will bring your hourly rate to $51.22.

Step 3, Figure out your business overhead by adding ALL of your expenses to run your business. Materials, shipping, software, etc… Let’s say you came up with $25,000.
Add this $25,000 to your salary. So $25,000 + $58,500 = $83,500. That is how much money you need to bring in to cover your overhead and salary. Shocking, right?

If you are a crafter, and make many things you want to sell, take the expenses for each one of the crafts and then do all this math! This equation will help you calculate how much to sell each piece for, in order to get a profit and bring some money home. That’s why you started this business, right? to make money.

Math sucks, but I did this math and so can you. This is all just part of the business side of creativity.

Best of luck,


Acknowledgement: Great part of this post was pulled from the book “The designer’s guide to marketing and Pricing” by Ilise Benun and Peleg Top.



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