If you want to know how professional logo designers estimate costs for their logo design services, consider the following real-world example. Let’s take a well-know mid-tier brand and hire an NYC-based agency to redesign the logo.
This sort of engagement would typically involve (at least) five people working on a project: graphic designers, researchers and a project manager. The work is supposed to be done in two months time.
According to Glassdoor (July 2022 data) the average salary of a senior graphic designer in the US is 96,000 USD. The average work on a logo of that calliper is 2 months. 96,000 divided by twelve times two and multiplied by 5 people equals to 80,000 USD. That’s just the salary costs. Add fixed and variable company costs. Add a profit margin on top.
Every professional logo designer, agency or freelancer, who has methodology and processes in place, will price their work based on three main components: research, number of options and marketing budget. Let’s examine this further. To know more about how logo estimates work, please refer to this logo pricing calculator.
How professional logo designers estimate logo design projects
1. Research volume
Every logo designer who is serious about their work will have methodology and processes in place. An effective company logo does not appear out of thin air. There are limitations and industry best practices logo designers must adhere to. The generated logo design ideas are rooted in the research.
Designers have to research client’s competition, the company itself, its values, take suggestions and wishes into account, assess trivial analogies, explore options, find differentiating ideas, and much more.
How much time will the logo designer(-s) be able allocate to research? Consider the vendor’s hourly rate and your company’s budget to deduce a rough estimate.
If a logo designer’s hourly rate is 50 USD and your budget is 1,000 USD you can’t expect them to devote more than 10-15 hours — that’s two days worth of work. If you believe that is more than enough for the quality your company needs, so be it.
It isn’t always the case that trademarks are part of the job. Subject to the number of markets your company is going to operate in the volume of trademark research can take its toll on the overall budget. Trademark research is usually a requirement for international mid-to-large size companies.
2. Number of options
Professional logo designers have to consider how many avenues they have to explore. The more options the client wants to have the more work for the designer.
As a client, you might be very specific about your vision for the logo. You might want to see a classic representation of your brand. You might want to consider a hip, cool version. Or you might want to see something in-between.
In most cases business leaders are vague. That’s why they tend to want as many options as possible. This approach never works. In our experience a good number of options is three to five. Clients don’t get overwhelmed with variety yet have distinct directions to choose from.
The logo designer will have an estimate of how much time it will take to explore (let’s say three) options. So when you as a client decide that you’d like to explore other directions, expect to pay additional fees.
The reason why we suggest our clients to stick to 3-5 options is because we know that clients have limited budgets; unlimited options will create nothing but frustration — and — there is no such thing as a perfect logo. Therefore the most prudent approach is to settle on a specific number of options based on your budget and then make a (hard but crucial) decision despite the desire to explore further.
3. Number of revisions
You can’t expect logo designers to make changes to your logo indefinitely, can you? There has to be some common-sense limitations. The limitation on the client’s end must be the budget and a deadline.
Some business leaders expect to have unlimited number of revisions. That’s not a good idea. The work will never gets done. Combine that with thinking in sequential terms and you will realize that you won’t be able to move further. Also consider how much time you’ll spend in endless meetings mulling over the trivial. It’s just counterproductive.
On the low-price logo design spectrum (on Fiverr for instance) you can encounter design gurus that offer unlimited revisions. Beware of these offers as they come from far-from-professional graphic designers. You will neither get a good quality logo from these folks nor a peace of mind.
4. Marketing budget
The price of a great logo is a function of a marketing budget. What does your marketing budget have to do with graphic design of a pretty drawing?
Consider the applications of your company’s logo. Where will it appear in public? If it’s just your website the consequences of having a bad logo aren’t terrible. However, if your website is popular with search engines, citations and third parties it will take a while before your improved logo will appear in all of them.
But what about printed materials such as business cards, brochures, magazines, publications, billboards, ads, stationeries, corporate swag, signage, packaging, office design elements, etc. How much will it cost your company to redo all of that if your logo doesn’t work well?
Good logo designers take all the implementations of the logo into consideration. They make sure that your brand’s logo will work on all of the marketing collateral both online and offline. So if you’re making a choice toward a cheap logo design, be honest and cognizant about potential problems.
Refer to this logo estimator if you want to have a better idea on what to expect from professional logo design services.
How much money does it make sense to invest in a company logo?
Let’s look into several scenarios to better understand which one applies best for your situation.
1. Free logo
This is a viable option for bootstrapped upstarts and petite businesses: one-man shows, companies testing waters and tiny firms that have no intentional prerequisites of becoming a bigger player in the marketplace.
Let’s be honest — when the company is tiny, no one knows about its existence and so no one really cares what sort of logo it might have.
Free logo is at least something — a start. Instead of spending time on meaningless contemplations over the logo design the time should be spent more productively — figuring out how to make money to sustain the business. When the business grows it will be able to afford a better logo.
There are plenty of resources to get a free logo from. There are even free online AI logo generators. This method will not produce great results and we don’t recommend it but it will work in the circumstances described above.
2. Cheap logo
This option is for small companies, local players who need to put themselves on a map, have some capital to invest but don’t have a marketing budget in place.
A cheap up to $100 logo is what you can get from designers living in countries with low per capita income. You can find these people on freelance platforms. Please be aware and accept this for a fact that this engagement will be a hit or a miss.
You might get a decent logo for $100 right off the bat but you should expect to spend thrice as much if you don’t. If you aren’t lucky the first time you will have to change your service provider for (hopefully) a better one.
Our suggestion is not to hold your hopes high. Understand what you’re signing up for. Accept the fact that you are getting cheap service for a low price and that’s that.
3. Professional logo
When your business has been around for several years, when you have a solid customer base and you want to grow your business, consider hiring professional logo designers or design agencies.
These vendors come in all shapes and forms. What you want to look for is someone who creates logos based on methodology, process and industry best practices rather than personal tastes, the-more-the-better approach or latest logo design trends.
Subject to the locale of the design firm you should expect to invest 1,000 USD to 20,000 USD for a professional logo design for your small business.
For example, a five year old company with $10M in revenue should have a marketing budget of about $1M. Subject to the number of logo applications per marketing needs the company will be looking to invest $10,000 — $20,000 in logo design services.
4. World-class logo
Let’s be candid here — small businesses cannot afford a world-class logo and neither they should strive to hire a renowned agency. When the time comes, when the business had grown into a larger entity, it will be able to afford (and most likely require) a brand redesign with the world’s best graphic designers.
The world’s best agencies charge $200,000 and up. And for good reasons. Focus on growing your company and eventually you will be able to afford this investment.
If you are looking to avoid the major pitfalls working with logo designers and successfully create a logo for your brand, consider reading this article.
To be able to learn from other small business owners’ mistakes, read the following article about most common logo design misconceptions.
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