price quotation for a new custom font

(Continued)
I'll repeat this, because this is important:

One WORKING day (i.e. about 8 hours) needs to provide financing for about three FULL days (i.e. 72 hours) of your life. That's if you work 8 hours every single working day.

So if you take your current monthly budget of "your own" expenses, you actually need to generate the income to cover that budget in ten working days, i.e. two weeks. Because the other two weeks need to generate income to cover your retirement, raising your children etc. etc.

If you work half-time, then each working day needs to provide financing for about six full days, so you need to cover your monthly expenses in five working days, i.e. a week.

The 1:3 is a useful multiplier to keep in mind. Let's say you only have one big project per year where your client pays you an hourly rate for three months of full-time work. This means that you work "quarter time", so each working day needs to provide financing of about two weeks of your life.

That just gets your "private" expenses covered. But then, there's also cost of business operation: office space, buying software, buying a new computer every now and then, paying other people if needed etc. That comes extra. Fortunately, operating the type design business is relatively cheap, compared to many other professions.

And on top of all that, there's "profit" that can go into "extra consumption", i.e. money for things that you don't necessarily need but would enjoy, or into "savings" i.e. money you'd like to leave your children and so on. (Savings for retirement are not "real" savings.)

The U.S. minimum wage is about $10/hour, or $80/day or $1,600/month. That's roughly equivalent to what you minimally need per month to survive. But that's for wages, assuming full-time employment. But that's useful data. It's roughly equivalent to saying that you need about $27 every single day of your life as a bare minimum to survive in the U.S., on average. Which, I think, is realistic.

If the U.S. minimum wage is $10/hour, but you as a self-employed person only have a project that pays you three months in a year, then it means that you need to absolutely charge no less than $40/hour *net*. But as you have to pay various expenses which can be up to 50%, you should absolutely charge no less than $60/hour.

So there, we're actually in agreement to what Bruno said about $46/hour. Because a $60/hour is a hourly rate still under the assumption that you'll have actual paid full-time occupation three months in a year every year of your professional active time. And that's really calculated only to cover your "personal existence" on the level equivalent to U.S. minimum wage!

Very very roughly speaking, as a self-employed person in Western Europe or North America, you need to be making >$90K gross a year at the very least to have a reasonable though modest way of living throughout your entire life. In Central and Eastern Europe, that figure is closer to $50K. If it's below that, you're DANGEROUSLY in the red, and you should seriously think about finding a different source of income. Because you'll end up in debt or poverty.

If you're based in Western Europe or North America, and calculate anywhere below $60/hours for client work, you're actually hurting yourself in the longer term, because you're not actually making less money than what you need in order to just survive. (If you're in other parts of the world, that figure may be lower, closer to $40 or $30, but not much less.)

Bruno's example of $46/hour translates to some $7K per month or $95K (gross) per year if you're making $46/hour EVERY WORKING DAY, "full-time". Then you're within the said recommendations. But, depending on your setup, it may not be at all realistic that you're making $46/hour EVERY DAY.

More realistically, as a self-employed type designer, you'll have PAID "full-time" work for about 3-4 months a year. Maybe 6. So to get to the $90K a year, you need to be charging two-three times the $46/hour, i.e. more like $90-120. And you're still not really "rich".

I agree with Bruno that one working month is actually a minimum to complete one style of a family with a relatively small character set. And if it's four styles, it's perhaps three months rather than four, but not much less. Time savings only start with more weights because of interpolation. But clients are demanding, back-and-forth, corrections etc. consume a lot of time as well.

Remember the 1:3 multiplier: if you have PAID work 8 hours a day EVERY single day, then one working day needs to provide financing for about three full days of your life. That's the absolute bare minimum.

So, make your calculations wisely!

Best,
Adam

Hi everyone,

Sorry for not responding until now. Too many other things to do like worrying how I can make the hours pay. :-)

I think it's worth responding to a few points:
In no way I am telling anyone what to do. If you want to create functional fonts for clients for $7000 then that is your business. Agreed, the cost also depends where you are located. This is a reason why Egyptian agriculture is still fairly void of machinery. Humans cost less than machines... What I am saying is that once you work for a low fee it is incredibly difficult to raise your prices. I am speaking of experience, over 20 years of it.

Frank, your argument of shifting your income from hour to day is self-defeating. Surely, the ambition should be to spend fewer hours on paid work, and earn vastly more in the process, so you can spend the other hours following your other interests that make you happy. That may even be more type design, but your own fancies, not those of a client. So again, you need to get your hours paid, not your days. The more you earn per hour, the fewer hours you have to work. Simple.

I also noticed that library fonts have been mentioned. It is of course possible that you hit gold with a design and it pays and pays. Those are few and far between. At Dalton Maag we have five font families that earn 97% of all the income from the library. The problem with library development is that the designer takes all the risk upfront with no guarantee that they will ever see a return from their efforts. When it hits, it can hit big, though. It's also worth remembering that only a handful of fonts will have lasting income potential. By lasting I mean at least ten years.

So, to make a good living with pension potential you probably need to have a mix of custom work and library fonts going. The custom work should give you the funds to pay for itself, of course, for your library developments, your holidays, and eventually your retirement. You cannot bank on having a successful library. This will be a bonus and give you that extra holiday.

In conclusion, yes my calculations are based on London prices. And yes, other people have other cost bases, and yes, I am fully aware of supply and demand, and that people will start off with lower pricing to get into the business. I can live with that; I am merely pointing out the dangers of doing so, and perpetuating the myth of low hourly income and long working days.

Bruno