Giving Your Time A Monetary Value

What are you worth? As a graduate you will need to know your market value as a prospective employee, or your day-rate in self-employment. This blog has direct relevance to designers and artists but makes significant points for anyone considering self-employment, where work time needs to be quantified and given a monetary value.

I am the Course Leader for the BA Graphic Design, which will launch in 2018. After fifteen years of self-employment my return to academic life required some mental adjustment, I work and I get paid. Not so for the self-employed who need to invoice clients and chase payment, but how much should they charge? At business start-up seminars the difficult questions revolve around rates of pay. The starting point for discovering the answer is a business plan. You may investigate business plans in professional practice elements of your course. Here are the key points. From sole traders to large corporations a projection of income and expenses is a significant part of business planning.

The table T001 illustrates items that should be included when assessing the levels of business income needed to cover business costs, and personal drawings; the book-keeping term for a salary.

Table T001

Some people say your work is worth what people are prepared to pay for it. That is true, but also not very helpful when seeking to give your time a monetary value. Some artists and designers give their work away in hope of getting a foot on the career ladder, but it is next to impossible to then begin charging those clients because they only need to look for the next eager creative willing to work pro bono. There has to be a compelling reason to work for free.

What you charge matters. If you sell too cheaply you won’t be able to make a living from your creativity or afford the equipment you need; computers will need replacing every five years or so. If you want to find out what to charge try crunching these numbers. Take the average salary for your country. In the UK that’s about £26,500, but I will round that up to £30,000. If you want more money start with that figure. Take your desired salary, I will choose £30,000 and divide that by 48 weeks. We all need a vacation. That comes to £625 per week. However, if you work on your own you will need time to market yourself and do some bookkeeping. Realistically that means you will have three chargeable days in a week; £625 divided by 3, equals £208 per day, which we can round up to £210. Divide that by the 7 chargeable hours of a working day, that rounds to £30 per hour.

Accountants will have already noticed I have not factored in costs, which include fixed costs such studio rent, equipment renewal, car payments, the list goes on. For ease of calculation let say you have £15,000 of costs per year, that can be translated to £15 on top of your the hour rate, which in this scenario totals as £45 per hour or £315 per day. So that is three days of full work for forty-eight weeks of the year to achieve the goal salary!

I have no wish to be a doom monger. Working in the creative industries can be an exciting and rewarding career, success and failure go hand in hand. It’s a rollercoaster ride. Sometimes its best to refuse a job than sell yourself too cheaply.

Your monetary worth has three values, which you should keep private. The first value is your breakeven point, where taking on a job means payment that will do little more than cover your costs and generate a modest personal income. The next level is where a job pays enough to bring a little luxury into your life; this should be the standard rate for your work. The last rate is where an extraordinary high level of professional and special commitment is rewarded handsomely. I refer to this as the yippee ki-yay rate. In the creative industries the yippee ki-yay moments increase as careers develop. It take time and patience and an understanding of your worth to get there. Let’s put some figures to those three rates. A self-employed break-even point is likely to be more than £150 per day; it depends on your costs. The middle-rate for a professional would be approximately £350.00 per day, and the higher-rate would exceed £600.00 per day. As I write dozens of caveats, clauses, and exemptions come to mind, but I’ll leave you with these thoughts.

As a professional, regardless of your discipline, you will need to understand not only the rate you need to charge, but why and how you arrive at that rate.

Clients won’t want to hear that you charge yourself out at different rates, however, they will understand that offers of longterm regular work will be charged at a lower rate that emergency one-off contracts.

As you start out on your career you will need to build a portfolio of commissioned work. Sometimes it makes sense to work at break-even rates, rarely should you work pro-bono.

Successful professional practice is based on you being paid to work, and not the other way round.

There is no hiding from the arithmetic, or the taxes, but to know your price is essential for any aspiring professional.

Your work is worth what people are prepared to pay for it, but if that is not enough to keep body and soul together you need to change your plans.

This blog is also available as a pdf, to download click here: Valuing Your Work Hope Blog

Written by Mark Wood, Course Leader for the BA Graphic Design, woodm@hope.ac.uk

 

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s