How to Handle Change Requests
Focusing on the Climb

Estimating Projects by Long-Term Asset Value

Logo Cost TBD

In 1998, I remember catching up with one of my former classmates from college and hearing about their experiences of working at their first design studio as an intern. She related to me the following story (which I hope wasn't mangled by my faulty memory banks):

"All of the designers were really busy, so one of the owners gave me an identity project to work on over a week. I worked on a few concepts, but the one that I was really excited about had the last letter of the logo (a T) working like a construction crane picking up the letter to the left of it.
My boss showed the logos to the client and they immediately fell in love with my favorite. With just a little bit of further work, we delivered the logo and invoiced the client their standard fee for the logo. At the time, it seemed like a robbery for the amount of time I put into it.
My boss was really happy, they didn't have to spend much time art directing me, and they offered me a job when my internship was up."

As I asked her further questions about how the project went, then did the math:

One logo. One intern with minimal oversight. One week. $8,000 flat rate fee for just the mark.

Those who have spent a good amount of time in the world of designing websites and/or applications understand the importance of creating time-based estimates for client deliverables. But designers that work in the print design world often short-change the real-world value of their work by focusing exclusively on the billable time necessary to complete the project deliverables. When estimating projects that yield any kind of tangible business asset, you may need to factor into your fee the impact that said asset has on your client's overall business value.

As an example, we often drag out of the closet the story of Carolyn Davidson, a graphic design student that created the Nike swoosh in 1971 for $35. (Even then, a paltry sum.) Yes, Carolyn couldn't have predicted how large Nike would become over time—but it's part of our tap-dance with the client in the early proposal stage to gauge their business direction and estimate the long-term value of our efforts for our clients. We then use that knowledge to craft an appropriate estimate, just as a photographer would charge a client for rights usage. "Well, how long will that take you? You can just charge me that," just isn't a valid rebuttal from a client. (Neither is, "I'll go hire one of those $50 for a logo outfits.") There are good resources that help with fulfilling this type of estimating task, such as the Graphic Artists Guild Handbook.

To see how things work nowadays in a design studio that handles a high number of brand development projects, I emailed my friend Wendy. She's a principal at Quesinberry and Associates in Seattle. She wrote back the following, which added important nuance to these thoughts:

"Some items, such as a logo, I can’t estimate because I’ve done a logo in 1 hour, and then I’ve done some that take 100 hours. I charge based on the value a logo is to their business its long-term branding.
Then take something like a white paper. From concept design through delivery, a job like that will take us 25-35 hours. A large company doesn’t blink an eye at a budget like that, but smaller companies can’t afford it. If it’s for a good client who sends a lot of business to us, I consider the value that white paper will be for their business and estimate accordingly. If it’s a one-time client, or a client with perpetually small budgets, I refer them to a designer who can work within smaller budgets."
"There are of course a number of projects that fall into a predictable pattern and can only be determined by a history of careful tracking of hours. Each day, everyone in our office completes their timesheet. Because every project is different and seems to introduce a new chaos factor, we are constantly refining the budget range for these type of projects. If it’s a new client, we lean towards the high-end to allow for bumps incurred building the new relationship. If it’s a long-term client, we can determine their patterns and whether most of their projects are quick and smooth, or not."

Even if you begin to produce blended estimates (time and materials + asset value), you need to meticulously track the actual time spent on projects to ensure that if you are spending those 100 hours on a logo, you aren't blowing your overall studio budget over time.

Ah, timesheets. Sorry. You'll never escape them.

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Interested in learning more about project estimating? I'll be covering it as part of the AIGA Seattle's "Design Business for Breakfast" series, January–March 2010.

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