Is Logo Designing Profitable?

Written By: Ahfaz AhmedUpdated On: October 25, 2023

Today, I’m going to answer a question that many new designers in general have. I often see designers asking “Is Logo Designing Profitable?”.

Yes, logo designing is profitable and can help you make a lot of money. But it all depends on what type of clients you work with and how much you charge for a logo.

One factor that is often ignored among designers is what does profitable means in the context of logo designing? Is designing a $100 logo profitable to you? Or a $1000 logo? I’ll be answering this and many other similar questions in this article.

Let’s begin.

How Do You Calculate Profit In A Logo Design Project?

In a world where people are designing logos for just $5, it’s difficult to figure out a typical or average price of a logo design project.

But, on average, as a freelance designer, you can charge around $200-$1000 for a logo design project.

Now, what’s important here is to find whether your work is profitable or not.

One of the best methods to calculate your profit margin is by assigning value to your time and skills as an expense. And then, add a profit margin of 20-30% on top of that.

So, let’s say it takes you 7 hours to design a logo. And your time is worth $80/hr. So, your cost of the project would be $560.

Now, if you add a profit margin of 25%, the total project should cost $700.

You can use this method to calculate your rates. Now, this doesn’t mean the value of your time should remain the same.

As Ryan Waggoner says in this article, “Your cost is your floor, not the ceiling.”

Once you calculate the cost of a logo design project, you can add your profit margin and decide if it’s profitable for you or not.

But in many cases, there’s a different pricing strategy you should use which I talk about later in the article.

How Much Should You Charge For Logo Designing?

Now, you know how to calculate and set your profit margin for a logo design project. But how do assign value to your time in the first place? How would you know whether your time is worth $50 or $200?

Well, there are many factors involved in deciding that. The most important thing you should know is that your time value should never be fixed.

Here are the different factors that you should consider while setting a rate for your logo design services:

Assess Your Skills And Quality Of Work

How good you are at designing logos is extremely important in deciding your logo design rates. If you’re a new designer who isn’t very experienced in designing logos, you shouldn’t set a rate as high as $1000.

Evaluate your skills and then take a look at the market. How much do designers with the same skillset or quality of work as you charge for logos? That would help you determine how much your skills are worth.

Understand The Client And Their Budget

The client and their budget also come into play when quoting a price. If your client’s budget is low, you can’t quote them a price that they can’t afford.

On the flip side, if you land a high-budget client, you will lose money if you quote a price too low.

Moreover, the scope of the project is also important. The client could either ask for a logo or a complete branding service that includes packaging, mockups, identity systems, etc.

In such cases, you can add additional charges to your service for the different work you do as a part of the project.

Tips To Make More Money Designing Logos

Here are some more tips that will help you make more money from your logo design services.

Do More Than Just Designing A Logo

You don’t just have to design a logo in a logo design project. You can add additional services as a part of your service and add charges for those services.

For example, I always do extensive brand research in all my logo design projects. This takes quite a bit of time so I’ve adjusted my rates accordingly so that the project is still profitable for me. I also provide logo usage guidelines and other relevant documents to my clients as well.

Here are some examples of what else you can offer to your clients besides the logo:

Help them out with brand strategy and identity
Offer multiple revisions of your work
Offer brand guidelines document
Offer high-quality mockup designs

Doing this will not only help you increase and justify your logo design rate but also show the client that you’re offering much more than just a simple logo.

The more value you provide to your client, the easier it will be for you to make more money.

Change Your Pricing Strategy

If you feel your logo design work isn’t profitable or worth the money, consider changing your pricing strategy.

Many designers charge by the hour but that’s not the best method if you really want to make good money designing logos and become a successful freelance designer.

Yes, you can use an hourly rate to determine your time’s worth, but when it comes to negotiating with clients, hourly rates don’t always justify the project’s cost.

The best method that I recommend and follow myself is value-based pricing. It is a more nuanced pricing strategy in which you price your service based on the client’s perceived value of the product.

Imagine you design a logo for a client for just $100. And then your logo helped the client generate $10K in revenues.

How would that make you feel? Pretty crappy, right?

You would feel that your logo was worth more than $100 to your client and you should’ve charged more.

That’s why value-based pricing is so important for designers. Try to understand how much value your work will bring to your client. And based on that value, decide your rates for the project.

Create Packages Of Your Logo Design Service

I talked about how you can provide more value to your clients and make more money. A slight alternative to that approach is creating multiple packages of your service.

This way, you can upsell your packages and make more money. For example, let’s say your basic logo design package costs $250. You can create a new package where you also provide mockups and charge $300 for this package.

In many cases, the client would be inclined to choose a higher package as they’ll get more value from it.

Increase Your Pricing

At some point, you’ll hit the ceiling with the work you do. When you reach this point where you feel like your work is worth more than what you’re currently charging, you should consider increasing your pricing.

Remember your freelance design journey should be on an upward trajectory. And for that to happen, every once in a while, you should increase your rates. But make small increments to your pricing instead of making huge leaps.

Conclusion

Anything you’re skilled at can be profitable as long as you work smart. When it comes to logo designing, the answer is: yes, logo designing is profitable and you can run a successful logo design business.

But your success depends on your skills not only as a designer but also in doing business such as pricing, negotiations, marketing yourself, and more.