Freelance Skills for UI/UX Designer: Calculating Costs, Quotations, and Contracts

Hi, everyone! I'm Simon, currently a product designer working in Tokyo. After spending some time, I've finally completed this article about the skills of freelancing for designers.

For those who haven’t read the previous episode, you can click the link below to read it first: Freelance Skills for UI/UX Designer: How to Choose the Right Projects, and Selecting Clients Carefully?

Continuing from where we left off discussing the mindset required before being a freelancer, in this article, we will talk about the things that everyone cares more about, which are the practical problems encountered when freelancing: costs, quotations, contracts, and so on.

Without further ado, let’s get started!

About the Cost

Many people believe that freelancing is all about delivering design results, getting paid by the client, and whatever is left after deducting the costs is the actual profit – a clear-cut concept. In reality, being a freelance designer, the costs you have to bear and the way you calculate those costs might be much more complicated than you think.

Costs can be divided into visible and invisible costs:

Visible Costs

Let’s imagine you are a freelancer;then you will need to use your computer (equipment cost), your space (rent), your design software (legitimate versions require payment), and even utilities, administrative and miscellaneous expenses, and labor and health insurance, etc.

Simply put, the resources and benefits you get while working in a company are usually absent when freelancing. Consider this: what if your computer suddenly breaks down during a project? What if the software license expires and needs renewal? What if working from home in hot weather results in high electricity bills due to air conditioning? These are all costs that need to be considered when freelancing.

Invisible Costs

Apart from monetary expenditures, there are many hidden costs that we might not notice. These costs might not affect your actual income, but managing these costs can significantly impact work efficiency and benefit personal development in the future. Here are a few common hidden costs:

1. Communication Costs: The first cost encountered in freelancing is communication. If there is good communication between both parties during cooperation, everything will be fine. However, if there’s often a mismatch in the understanding of objectives or styles, designers would need to spend a considerable amount of time communicating.

Once there’s a mutual understanding and rapport, this communication cost would decrease. Of course, designers can also practice some techniques to persuade clients and reduce these communication costs.

2. Favor Costs: This often appears with well-acquainted clients. Being familiar, you might be more susceptible to price haggling, additional random requirements, or demands, and it might be awkward to refuse them. The added workload in such cases constitutes your favor cost – not doing it might hurt feelings, but doing it increases the burden. This cost largely depends on your relationship with the client and whether you deem it worth undertaking.

3. Learning Costs: In UI/UX freelancing, not every project might be right up your alley. Sometimes it could be an entirely new domain or trying new techniques due to project requirements. Often, you might find yourself spending time researching and investigating, so the actual execution might take longer than expected. This should also be considered when freelancing.

4. Project Management Costs: Since it's freelancing, naturally, no one will supervise your progress. Everything is ‘self-managed.’ Clients will expect deliverables within the agreed time. Whether it's a lag in progress or wanting to expedite the project, you must manage appropriately. If you are handling multiple projects, this cost must also be taken into consideration.

In conclusion, there are various kinds of freelance costs. However, it’s essential to note that lower costs aren’t always better. While these hidden costs might sometimes feel overwhelming, appropriate pressure can prevent you from repeating the same mistakes, clarify issues, and guide you in quoting and deciding whether to accept a project or not.

Quoting: Not Just Knowledge, but More Like an Art

Now, let's discuss an essential question, which many people might be curious about, "how to quote a price."

Undoubtedly, quoting is an art of its own. I've struggled for a long time on how to quote accurately. Even now, it is often challenging to give an exact number due to various factors such as personal capabilities & experience, project difficulty, time constraints, and client's budget.

There are many methods of quoting for freelance projects available online, presenting a variety of approaches. My personal insight is: there is no standard answer for quoting, only what suits you or the specific project at the moment.

Simply put, "Do you understand your worth enough, and do you have sufficient judgment towards the project and the client?"

Quoting might seem mysterious, but there are ways to help you make basic judgments. A too high quote might scare off clients, while too low of a quote might not even match a part-time student's hourly wage, and it might adversely affect the market conditions.

Quoting by Hourly Rate

Currently, I recommend using an "hourly rate" to set your quote. Establish your desired hourly wage and add the estimated project working hours to get a basic quote. To set your "project hourly wage," the simplest way is to consider your current monthly salary and convert it to an hourly wage, then make slight adjustments based on various conditions.

For example: if your current salary is NT$ 40,000, working 22 days a month, 8 hours a day, then your hourly wage would be approximately NT$ 40,000/22/8=227.

But, remember the costs we mentioned earlier?

You can adjust this number upwards. Usually, I would multiply it by 1.5 or 2 times for my project hourly wage, or increase the quote based on the project's difficulty. For urgent projects, I generally increase the quote. Remember, quoting is an art. Sometimes the client is very keen on collaborating with you, but they may be on a tight budget. In such cases, you might evaluate whether a lower price might lead to more potential opportunities and benefits in the future.

If you know the client has a considerable budget, you might try quoting a higher price, but remember, a higher quote requires more precise design quality.

Let’s Look at a Practical Case

Consider a medium-sized App project from a startup company with a limited budget. It has about 5-6 core functions, roughly estimating 70-80 UI pages, including planning the UI flow and wireframe, and finally delivering a complete design draft and exported images for use. In this case, you can think about how much time you need for each stage, adding some flexibility for initial research, communication costs, project management, etc., and then calculate the total hours needed.

The calculation method would probably look like this:

227 (current hourly rate) x 2 (cost weighting) ≈ 450 (expected hourly rate)
450 dollars x 120 (estimated working hours) + 450 x 20 (other flexible hours) =NT$ 63,000 (final quote)

"The more you understand the client’s specifications and needs, the more accurate the quote you can provide."

Using such a simple method, you can roughly estimate a price and then make minor adjustments based on different project conditions. Although, many times, it depends on your experience and whether you know how much time you need to complete the work. After more project experience, you will know what quoting method suits you, and it actually varies from person to person.

Therefore, based on the above viewpoint, I often doubt whenever I see someone recruiting for Logo design on PTT with only a 1,500 dollar budget, and there are still many people replying that they want to take the project. In a 1,500 dollar budget, it includes communication, proposal, design, revision, file delivery, and other tasks. If you need at least 10 hours to complete it, the calculated hourly wage is less than NT$150. Is taking this project really good for you?

Design is a profession. Accepting projects at a low price is not healthy for the entire market and will also cultivate more clients who do not understand the real market value. So, think thrice before accepting a project and quoting a price.

Signing a Contract: Protecting Both Parties' rights

In the beginning, when I first started taking graphic design projects, I had a bad habit of not signing contracts. Firstly, it felt like the amount wasn’t substantial, and signing a contract seemed too formal. Secondly, it felt like a verbal agreement should suffice. The result, however, proved otherwise. Either constant revisions were requested, leading to a significant overrun of working hours, or the final payment was delayed for a long time. These are the consequences of not having a contract to bind each other.

A "verbal contract" is even less viable in digital design areas such as UI/UX and product design. Compared to graphic design, the process of product creation involves much more communication and modification of requirements. Consequently, the corresponding fees tend to be higher as well. Thus, all aspects such as deliverables, project timeline, development progress, and payment schedule need to be clearly communicated.

Therefore, I would suggest that when taking on UI/UX design projects, whether or not you are familiar with the client, it is best to write down a contract, recording all the details. This not only protects yourself but also gives the client a clearer outline of the execution of your project.

From my experience, if the cooperation process is smooth, the signed contract is usually just set aside and not really referred to. The contractual constraint, in my opinion, tends to be more "psychological" since cooperative relationships are generally built on "trust," and it’s rare that anyone would intentionally delay or randomly change requirements. However, when actual issues arise, a contract allows both parties to have a unified consensus and reference.

How should the contract be structured? Firstly, if possible, it’s better to draft the contract yourself rather than letting the client provide it. Even if the client provides a generic version from their company, the designer still needs to review the details carefully. Ultimately, the contract content should be "jointly drafted" and agreed upon by both parties.

There are many contract templates available online that can be downloaded and adjusted based on individual needs. However, there are several key points to pay special attention to:

1. Deliverables: This is crucial. What exactly needs to be delivered at the end of the project? Is it just the visual drafts? Or also the wireframes, flowcharts, or even the original files? Everything that needs to be delivered should be clearly stated in the contract.

2. Project Acceptance Schedule: For UI/UX design, it’s not advisable to complete everything at once and then review. Regular communication (around 1-2 times per week) is ideal, and it’s best if the project content can be accepted in stages. This can align well with the payment schedule and facilitate project progress.

3. Payment Schedule: There are various payment methods, and you can choose based on your own preferences. However, for projects exceeding 100,000 in total, I suggest splitting the payment into at least three parts: initial payment (after signing the contract, before starting work), midterm payment (after the first phase of design is accepted), and the final payment (after all are accepted and files are delivered).

4 .Revision Times: The issue of "unlimited revisions" is quite common and can easily occur if not clearly communicated before the project starts. Conditions for revisions must be clearly stated to avoid this problem.

5. Intellectual Property Rights and Confidentiality Clauses: During the project, content generally can’t be made public. After the project ends, details such as who holds the copyright and whether it can be publicly displayed need to be clearly communicated.

How to Conclude a Project

At the end of a contract, it is essential to adhere to its stipulations and mutually verify and tally the files to be delivered. If you intend to use a commercial project as part of your personal portfolio, be mindful of whether confidentiality clauses have been signed or if intellectual property rights are mentioned in the contract to belong to the client. Generally, as long as the material is not used for commercial profit, the author should retain exhibition rights to the work. However, it’s prudent to communicate with the client for consent before adding commercial projects to your portfolio, ensuring these are ideally publicized after the project is live.

Post-project, remember to maintain good relations with the client. Periodic casual check-ins or expressing interest in the company’s ongoing projects or overall well-being are good practices. Establishing good rapport ensures that you are foremost in the client’s mind when there is a new project or if a friend needs design recommendations. I believe that most clients prefer long-term collaborations, helping to avoid unnecessary preliminary adjustments.

Bonus Section: How to Source Projects

Finding projects is perhaps a pervasive challenge. However, I personally believe in serendipity. If your capabilities and experiences are well-prepared, you are more assured when opportunity knocks.

Here are several sources of projects:

1. Project Platforms: Numerous platforms and channels exist for project outsourcing (such as digital outsourcing websites and ptt_soho, etc.).

However, they often come with downsides such as heavy competition, information asymmetry, and varying project qualities. There might also be a membership fee. I personally wouldn’t highly recommend these platforms due to prevalent price undercutting. Clients usually opt for the most affordable designers. Unless you are keen on a bulk of projects, regardless of their nature, finding a worthwhile project here is not highly likely.

2. Networking Referrals: This is a more common and recommended method I use, although it is initially challenging and requires sustained effort over time. Start by getting to know more people in the industry; more acquaintances generally mean more opportunities. Always maintain a good relationship with clients during every project, as satisfactory collaborations could lead to more referrals.

3. Personal Exposure: This is a relatively passive method, but long-term personal branding is recommended, as being 'visible' isn’t so easy in this information-saturated era. Strategies such as social media presence, article writing, sharing works, having a personal website, participating in gatherings, or public speaking can help establish a personal brand. When someone requires design services, your name is likely to pop up in their mind.

Conclusion

Whether you aim to freelance or become a self-employed worker, behind the apparent flexibility lies responsibility and effort that might not necessarily be less than a regular job. Freelancing is an excellent way to hone one's skills, enhancing time management and productivity within limited timeframes. Hence, it is highly recommended for those who get a chance. Responsible freelancing for both oneself and the client is undoubtedly a rewarding experience.

–

This article is reprinted from：Simon Lin (article)

(This article is translated by the Digital Nomad editor group.)