How do you price creative work?

This might be the most common question people ask and obviously there is no single answer to this.

If you ever sat in a room with a client about a project you know the cat an mouse game of what's your budget vs. what's your rate. That's how it often goes. A game where both parties wait for the other to shoot first. In the hopes they get a better deal.

But ideally we don't have to participate in this run around and just show up with confidence to get the rate that allows us to do more work and have a good life.

Because that's what the money does. It allows you to keep going, each pay check extending your runway a little bit more and giving you enough money at the end of it to live the life that enables creativity. Even if creative work can be done in a factory style it's much more fulfilling if you have control over how you spend the time.

Now back to the actual question, how do you price creative work?

There are two frameworks that immediately come to mind when you want to figure out how much to charge for a project. But first it's good to remember one thing.

Creative Work is Service Work. You are in service for someone else. If you are paid for a finished product you are a craftsman and if people pay for the story behind the object you are an artist. But most of us are in the service industry.

The concepts I learned about are CODB and Value Based Pricing. There are probably more.

CODB stands for cost of doing business. So how much does it take you to stay in business. Every single day is costing money if you work or not. Depending on how many days you work or projects you accept your number changes.

As an easy (math) example imagine you need 100.000 € per year to live and run a business and on average you work 100 days. That means per day of you are hired for you need to charge 1.000 €. Anything below that and you start loosing money.

To find out what your number actually is you can make a copy of this spreadsheet, fill it in and adapt it to your specific needs.

Knowing this number is good regardless so you have a clear understanding of where your capital goes and how much you need to earn each year.

The other concept I'm familiar with is value based pricing.

Where it's not about you or how much you need to make but how much value are you providing the client.

Let's say you are hired to design a graphic T-Shirt for an established brand.

You can charge for the hours it takes you design it or you can charge for how much value it will generate for the client. A shirt with a mediocre design might sell 10.000 units while another might sell 50.000 units. Creating more value for the brand.

This is clearly more hypothetical than the cols hard facts of codb but it is a clear reason why you can charge wildly different prices for different clients.

An one more thing you can try if you got the confidence.

Set your rate for a specific service of yours. Then after a set amount of clients you raise the rate by 10%.

Offer 1 hour of coaching for 100 € after 5 clients it becomes 110 € after 10, 121 € and so forth. Continuously raising the bar until you stop getting bookings. If that happens go back down to the last viable rate ad you have found the ideal rate for you.