Any modern business is going to need design services. At one point or another they'll need designs for a logo, some business cards, flyers designs, and a smart looking website design.

For many business owners, it can be hard to determine just how much of their budget should be going to design. To figure this out, a business owner needs to evaluate their circumstances and base their design budget on a few different points.

Benefits of investing in design

How important is design and is it worth investing in? Design plays an important role for a business. Research has shown that good designs do improve the performance of a company in a number of ways. First, it helps to make your brand more identifiable to customers and the public is more likely to trust and want to do business with a brand that they can identify. Second, design helps to build a brand identity. Together these can improve sales and make for a more cohesive marketing strategy.

Identifying the designs you need created

To figure out your design budget, you are going to need to determine the types of designs you need/want. Take a look at your operation to analyze how you are already using designs, how much you've spent on them, what returns you've seen, and where opportunities lie.

Research your competition to see what designs they are using and in which formats. Consider whether you need a new logo, brochures, brand clothing, packaging, website design or something else. Once you have done your research, write a final list of the designs you need or want. Then, you need to know how much it will cost to get these designs made.

Know the market rates for the designers you need

Knowing what you will need to pay for designs is important to determine how much your design budget should be. It also means you can set your benchmark to help ensure costs don't spiral. When you hire a designer for a project, whether directly, or through a crowdsourcing platform such as DesignCrowd, you want to ensure you are paying a fair price for the work.

Paying an hourly rate to a freelancer or agency can leave you open to gradually rising costs each time you need a slight amendment, a new file format, or just a conversation about the project. One of the many benefits of crowdsouring on DesignCrowd is the fixed pricing means you can ensure you stick to your budget. There is certainty around the cost of the project, no hidden expenses, and the competition is based on quality rather than artificially inflated costs.

However, you always want to make sure you offer enough money in your project brief to get a good professional to dedicate an adequate amount of time to the work. At the time of writing, the BLS lists the median hourly rate for a graphic designer at $22.55/hour and for web developers it is about $30.52/hour.

Estimate how long your project should take

Setting a fair budget for a design project will help to ensure you get professionals who will provide quality results. To figure out the cost of a project, consider the going hourly rate for the type of designer you need and then multiply that by the estimated number of hours you expect the job to take.

Obviously, the better quality the design, the likelihood is it will take longer to produce. Then, if you want multiple versions of the logo, you should probably add in another few hours into your maths. Beyond that, if you need additional design material, you are going to have to add in more time for the extra work.

This is an estimated time frame, and should just work as a guideline to get you started. Even with a limited understanding of design, you can determine it by how 'hard' you'd want a member of staff to work on the project. Is it worth an hour, half a day, or a full day of their time to you?

Analyze budget

Once you have an estimate about how much it will cost to get the designs you want made, it is time to analyze your budget. A business owner first needs to understand that design is part of marketing which means your design costs are going to come out of your marketing budget.

To make a marketing budget, you need to get out the balance sheet and total up all of your expenses and income. When you know how much money you expect to profit in a year, you can then dedicate a portion of that money toward marketing. For most small businesses, a good rule of thumb is to go with at least 10% of expected profits going toward marketing. However, if you are a new business or starting a new marketing campaign, it could help to increase that sum to 20% or more.

Once you have the dollar amount for your marketing budget, you will analyze all of the marketing efforts you want to invest in and how much they cost. Prioritize the different marketing tactics, including your designs, and allot a percentage of the marketing budget to each tactic. Some companies may dedicate 25% of the marketing budget to designs, while others may dedicate 80%. It really depends on the needs of the company identified by the research and planning above.

You can plot your budget in a spreadsheet or personal financial app like Empower for easier tracking and organization. For even more control over your design-related expenses, consider using a budget tracking software designed for comprehensive business planning and forecasting needs. You can read through an Empower review to see if it's right for you.

Prioritize projects and plan them according to budget constraints

For many businesses, it might not be possible to meet all of their design goals at one time. If this is the case, then you need to figure out which design projects are the most important to your company and the ones that will yield the greatest benefit. Then you can schedule those most important designs first, and the rest throughout the year to match your budget.

Many business owners underestimate the value of design. It is not a direct profit driver like a product that you sell or a necessity like paying the rent, but it can be some of the most effective money you spend when it comes to building your business. To know just how much to spend, start by analyzing what designs you need, estimating the costs, looking at your budget, and assigning the needed percentage of the marketing budget to have them made.

Want More?

Good design is crucial for good branding. See how to use it here:

What To Consider When You Want To Print A Design

5 Tips for Utilizing Banner Ads to Maximize Your Brand

5 Advantages of Creating a Company Shirt

Written by Jessica Walrack on Monday, May 9, 2016

Jessica Walrack is a professional freelance writer with a background in sales and marketing. After 7 years in the corporate world, she stepped into the online sphere and has now been freelancing for 4 years. She specializes in helping businesses to create a stellar online experience for their audience in order to build industry authority and increase profitability. In her spare time, Jessica enjoys traveling all over the world with her family.