FAQs

Faktor can be beneficial to anyone who feels insecure or inexperienced about pricing creative services. It is especially helpful for beginners who lack experience pricing their work. Faktor is not only a guide but also a framework to simplify your process. Not everyone wants to sit down and spend hours on a single quote, and with Faktor you can generate one in minutes. We also see potential for businesses to use Faktor as a reference for how much budget they should allocate for creative services.

Faktor is designed for simplicity. Input information about you/your company, your client’s information, your services and generate a quote in minutes. You should have the following information at hand:

• if you are VAT-liable or not
• your location, experience level, company size
• your clients industry, company size, company type
• the services you want to offer

• Creator: location, experience level, company size
• Client: location, industry, company size (for businesses), funding stage (for startups), follower count (for artists/influencers)
• Optional fees & discounts: e.g. offer a loyalty discount, apply a rush fee, add payment processing fees
• Services specific factors: are applied based on scope when applicable

We are aware that projects for bigger companies may have to pass multiple stakeholder reviews, which is why our factors for company size already account for this. All prices include 2-3 revision rounds by default.

We currently only support services that we have experience invoicing ourselves. If you don’t see your service and would like to help us expand our service catalogue, please write us an email here.

No mathematical model is perfect. We meticulously added, tested and adapted parameters until we felt confident that the calculator generates realistic quotes. While they are quite precise, there will always be cases where you might want to intervene. What the calculator can do is show you your earning potential, especially if you haven’t worked with big companies or high-value industries yet. We are transparent with our methodology to keep the discussion open for suggestions and changes.

Faktor can supplement a proposal or give you an overview of your scope, but a successful proposal should include more than just a price breakdown. If you need more guidance on what to include in a proposal, check out our blog (coming soon) for resources for your business.

Faktor can generate a quote, and it can give you an idea of what you should be charging based on your client, the scope and your unique situation. It is not a proposal or a contract generator. While Faktor can give you confidence in your price, it does not replace negotiations with your client. If you still feel unsure about charging the price you generated with our tool, we suggest checking out the resources on our blog (coming soon), to gain more understanding about pricing creative services.

We initially worked with static base prices for each service but quickly noticed that this approach is hard to scale the way we wanted it to. We then worked backwards from the base prices to a theoretical hourly rate. The actual price doesn’t come from time spent.

The hourly base simply represents relative workload. The final amount is then adjusted through client and project factors that reflect context, impact, and risk, resulting in a value-based price. That’s why the base rate appears lower than expected: it’s not the value of your work yet, it’s only the starting measurement before the real pricing logic is applied.

Our reference city is Vienna, Austria with an hourly rate of €50. This rate is adjusted according to the data entered. Factors that affect the hourly rate are your location, experience and company size, as well as your client’s location, company size and industry.

We use data from Numbeo.com, a widely accepted index for local economic conditions around the world. The data used compares Cost of Living + Rent (CLR) and the Local Purchasing Power (LPP) for both your and your client’s locations. This brings the economic context for both parties into the equation.

The formula is: [(CLR client/CLR vienna)x(LPP client/LPP vienna)] / [(CLR creative/CLR vienna)x(LPP creative/LPP vienna)]

If your client is in a wealthier location than yours your hourly rate will increase. We limit this in the other direction to a factor of 0.9 to prevent you from charging below what you need to afford your cost of living.

We currently do not save or store any data that is entered. You may sign up for our newsletter if you want, but your email is not required to generate a quote. Your email address is only stored if you enter it AND hit subscribe. If you subscribe you agree to receiving emails from us. You can unsubscribe at any time via the link in our newsletter. To stay up to date with how your data is used check our privacy policy.

We are using the UN’s ‘International Standard Industrial Classification of All Economic Activities’ (ISIC) which wesummarized into subcategories. The latest report’s preface reads “Since the adoption of the original version of ISIC in 1948, the majority of countries around the world have used ISIC as their national activity classification or have developed national classifications derived from ISIC. ISIC has therefore provided guidance to countries in developing national activity classifications and has become an important tool for comparing statistical data on economic activities at the international level.”

In order to connect each industry with a factor we use the Margins of ISIC categories defined by Aswath Damodaran‘s research. Damodaran teaches at the Stern Business school in NYC. The margins are standardized between 0 and 1 and then scaled on a bandwidth of 0.7-2.2 which gives us a factor for each industry.

This data has limitations. It is US-centric, only uses data from publicly traded companies and is updated once a year in January. The goal is not to predict the exact budget of a specific client, but to prevent systemic underpricing across industries, and we believe the data set is sufficient for this purpose.

We based these factors on our experience in the industry. We have worked with a wide range of clients from companies with over 15k employees to startups with no funding. We tested the factors using invoice data from past projects and clients.

We classify a company as a startup when it is built for rapid growth and future scale rather than immediate profitability. These businesses often prioritize acquiring users, validating a product, or expanding into a market before becoming profitable. This may involve external funding, but it can also apply to bootstrapped companies following a similar growth model.

Local or traditional businesses typically need sustainable revenue early and operate within tighter margins.

An influencer or artist is a brand that is dependent on a single person and their persona/image. It can even be a celebrity. The reason we separated this from “company” is that the impact of these brands is dependent on the following size and influence of the persona behind the brand, which required a different factor logic.

The prices generated aim to be fair and appropriate. They reflect the value that a creative provides while neither under, nor over charging.

You can take a quote and run with it yes. While we believe Faktor generates accurate quotes, bear in mind that no mathematical model is perfect. There may be aspects in your project that require a higher or lower price than the quote Faktor provided you with.

Faktor is tested for project-based scopes but does not support things like long-term retainers, projects with zero budget but high return (rare but do exist), projects for friends/family, public sector/regulated budgets, maintenance work, and additional feedback rounds.

If you are unsure about the price generated, check out our blog (coming soon) for more resources and education on pricing.

It is a good reference point, but doesn’t replace your individual business judgment. In the long term we aim to become the standard reference point for pricing creative work, but for now Faktor is one option among many to create a price that works for you.

Hourly rates are a straightforward strategy to generate prices based on your personal costs and earning goals. Where hourly-based pricing falls short is taking client context into account. At Faktor we believe your value goes up the bigger your client is. A small local business will have a different budget, return and risk factor than a multi-million-dollar corporation and your prices should reflect that.

Faktor is a growing product, and future features will likely be behind a paywall, however the functionality you see here today will be free forever. Faktor is 100% self-funded and was created in our free time. We have invested a significant amount of time and private savings to create this tool. If you want to support us you can donate to us here.

Simply ask the company for their employee count, it‘s a non-invasive question. If they don’t want to tell you, you can either check their LinkedIn, Clay.com, or Google for an estimate.

The idea and concept for Faktor was created without AI. We use AI as a partner to double check the applicability of our ideas. For example, we used it to help us create a solid formula for the location factors that adjust the hourly rate. Most of our work and brainstorming was manual and we thoroughly discussed and implemented each step as a human team.

This logic is based on the font licensing logic introduced by Dinamo Typefaces which changed the industry. It is a straight-forward way to price based on company size. The bigger a company is, the more value they can extract out of your service. They are likely to have more touchpoints where your design is key, and more sales that depend on the success of your work. Larger projects also come with more risk and responsibility, which can only be considered if you factor this into your price.

If a company has a large budget, their return on investment is high, and when you are taking on more risk you should charge more than you would charge a small local business with an entirely different context. This is standard practice among large, established agencies, and big clients expect to pay more than their smaller counterparts.

Faktor is just one of many tools you can use to ensure profitability. We cannot guarantee economic success for anyone.

At this stage our main focus will be taking in feedback from our peers and users to improve the accuracy of our product. One major feature we are working on is the ability to export your quote as a PDF that you can use for a proposal or an invoice.

In the long run we want Faktor to grow into more than just a quote generator. To stay up to date on feature updates and future development sign up to our newsletter.

Designers systemically underprice high-value industries because they lack economic context. Faktor exists to reduce that imbalance.

Rebecca and Rebecca from Same Same Studio and Behind the Scope Podcast (link)and Daniel Gremme from Studio Daniel Gremme are the founders and creators of Faktor.

When Daniel started his own business he was curious about applying value-based pricing concepts to his pricing strategy. He explored ways to do this without asking clients about their annual profits. Thanks to his type design background and experience with font licensing he was familiar with prices based on employee count. He created an excel document to calculate prices based on industry and client size factors. Once the Rebeccas heard of this document they had the idea to create an online quote generator, and so the idea for Faktor was born.