As the year winds down, we’re looking back at the best stories of 2020—including some essential strategies and sound bites from Business Advice columnist Sean Low, who not only answers reader questions, but also unpacks the underlying business quandaries that have led to the problem in the first place. Here, his pointers on setting boundaries with clients, raising your rates, and reframing the way you think about (and explain) the way you charge.
Want to read more from Low? Start here. Have a question of your own to ask? Drop us a line.
NAVIGATING COVID-19
On setting new-client boundaries: “In this tenuous climate, along come your clients with their projects in midstream, not knowing if or when they will get to enjoy the fruits of their journey with you. It is, of course, important that you set boundaries of what behavior you will and will not accept, and what is and is not possible with respect to their project. However, what you must first do is take a moment to allow the situation to be what it is: emotional, irrational, exhausting, terrifying, depleting, depressing, simultaneously hopeless and hopeful.”
- Read more here.
On not lowering your rates for e-design: “In the end, I am confident that the importance of home as sanctuary will forever be etched into all of our minds and hearts—and even our souls. This means designers have to own the power of being singularly able to create the joy of these sanctuaries. It means having to walk the walk: choosing to be seen as on a par with other deeply valued professionals in our community like lawyers, doctors and accountants. Lowering your rates now that you are challenged will make living that truth oh-so-much harder, both for yourself and for designers in general. As challenging as it may seem on its face, now is the time to go the other way.”
- Read more here.
ADJUSTING YOUR PIPELINE OF NEW WORK
On overcoming a fear of saying no when faced with too many projects: “When you are worried that the sky is falling (or might fall again), you refuse to look up. Instead of working on your core—the strongest parts of your business—and trying to figure out how to further leverage these strengths, you over-leverage what was never meant to scale as currently constructed. In the name of security, you run away from what defines you, your art and your business. Quite literally, you close the door on your ideal clients, who are willing to pay for your full talent, and open the door for those who prefer a diluted version of you and your work.”
- Read more here.
On whether you can drop a too-small job once you’re busy again: “Keep in mind that if you flip the keys to a Ferrari to just about any 16-year-old, they are going to be enthusiastic. Your client’s enthusiasm about your work is a non-starter—they are getting a Ferrari for the price of a Hyundai (no disrespect to Hyundai). You have every right to remind them that you are, in fact, a Ferrari, which requires a certain sophistication to appreciate all that the car can do.
“Please note: I am not advising you to just do the job, I am only telling you to act with integrity. Have the hard talk and describe what is necessary for you to do your best work. These clients will, of course, not react well. Driving a Ferrari for the cost of a Hyundai tends to skew one’s worldview. Who cares? While you do need to endure the pain necessary to finish on your terms, you absolutely do not need to do so for a second longer on theirs.”
- Read more here.
GETTING BILLING RIGHT
On aligning your fee structure with your process: “Let us say that you are a parent of a very creative 8-year-old. She is drawing the sky and would like your help drawing a cloud because that will ensure everyone knows that it is the sky and it is huge. You have a decision to make: You can show her how to draw a cloud—or you can show her that drawing a series of birds will convey the scale of the sky in a more impactful way than clouds can. Quite literally, you see what she cannot yet. There is no right or wrong answer, just the one you are most comfortable with. ...
“The above example, of course, represents your mission as a designer. Will you work with and refine your clients’ existing mental framework, or take them someplace entirely new that they could never reach on their own? Those who do the former (draw clouds) typically ask for a series of ongoing fees, followed by a production fee to install the choices. On the other hand, those who do the latter are in the business of exposition (showing birds), and typically get paid with design fees, then manifest that vision through production fees charged either as a percentage of purchases and/or hourly fees. No matter where you land, you cannot be both things at once.”
- Read more here.
On charging for indecision: “If you charge by the hour, you are absolutely telling your clients that you want to spend more time with them, and therefore expect and even court them to change their minds and second-guess decisions. Why? Because there is a minimal price for them to change their minds.
“Let’s do a little math. Say you charge $250 per hour. It takes you 30 hours to come up with your original design, which they absolutely love (until they do not). It then takes five hours for you to come up with alternates once they decide that they want to reconsider, and three more hours for you to do it yet again. That nets out to $7,500 for the big design, plus $2,000 for changes. ... It gets cheaper and cheaper for your clients to keep you working. ... For you, though, the changes are a distraction—they are slowing you down and causing creative pain because you cannot manifest your creation the way you intend.”
“Would it be so absurd to tell your clients that your hourly rates for base design work are $250 per hour, but any revisions after the final presentation of ideas will be at $600 per hour, with a minimum of $3,600? ... Now, your client would really have to think about whether they wanted to reconsider decisions.”
- Read more here.
On raising your rates: “Telling a business story compelling enough to merit your fee is the challenge, not trying to decide whether or not the number is, in fact, the right number.”
- Read more here.
On reframing the way you talk about your fees: “You are very clear: Your design and production time is paid hourly. You also retail product at the same price as any other retailer of comparable products (i.e., item, size and quality). My advice is that you have to do a better job of delineating when you are acting as a designer and producer (i.e., charging hourly) and when you are acting as a retailer (i.e., charging markup). Each business should be separate, and should have its own profit goals that are unrelated to the other. The only way the retail business should be related to your design business is that you are its biggest (and perhaps only) client. As such, you get discounts—treatment similar to any other large and important client—and that is it.”
- Read more here.
On the prospective client who distrusts your retainer: “The biggest problem I see in your situation is that there seems to be confusion (maybe just from your client, but I’m guessing for you, too) between what you cost and what it costs. What do I mean by that? The value of your services to design and execute are separate from the costs of material and labor. Many designers have linked the two with markup on items in production, but that number only represents the amount necessary to produce your design. What it costs to create your design in the first place is something else entirely.”
- Read more here.
On setting terms for flat-fee clients: “To make the flat fee work for you, you will need to impose solid consequences for not meeting the requirements of the fee. For instance, if the fee is related to design, then what happens if the design is rejected? Will you quit? And if you go back and do the work again, how much will you charge? If the design is your first choice, it presumes everything you show afterwards is not; how far down are you willing to go in your selections? (Do you really want a project filled with your fifth choices?)”
- Read more here.
Homepage image: © Diamant24 / Adobe Stock
