Why most design firms won't do spec work

It's common for business owners to make unrealistic requests of design firms. Probably the most common is when they contact several design firms and ask them all to design something for them, whether it's a logo, brochure or some other piece, with the intent that they will choose one of the designs if they like it. While it may seem like there is nothing wrong with this request, in reality, there is. Think about how this request would be taken in any other industry.

Potential home buyer: I want you to build me a house and I'm going to have three other builders do the same thing. After these homes are completed, if I like one I'll purchase it.
Home builder: Uhhh...No.

Potential car buyer: I'm thinking about buying a car from either you or another car dealer with in a seventy mile radius. I'd like you to drop off one of each model of car that you have (the other car dealers will be doing the same) and after I've had a chance to drive all of them for a while I'll decide if I want to buy one.
Car dealer: Uhhh...No.

Restaurant visitor: I don't know what I want to eat, but I'll know what I like when I taste it. I want you to make everything from your menu deliver it to my house. Keep in mind that the Chinese, Italian and Mexican restaurants will be delivering their food as well. After tasting everything, if I'm still hungry, I will choose a meal from one restaurant.
Restaurant owner: Uhhh...No.

The bottom line is that graphic design is a business. You wouldn't run your business by handing out your product or service for free in hopes that someone might feel like paying for it and you shouldn't expect a design firm or designer to do so. Some firms will do spec work, but they usually fall into one of two categories. They are either brand new firms with no experience trying to land their first clients, or they are huge firms that only work with clients that have multi-million dollar advertising budgets.

Like any other business, a graphic design firm has overhead. By working on spec, they are forced to raise their prices because unlike some businesses that sell a product, graphic designers can not take back their time and resell it. Many people take for granted the overhead that can be necessary to run a graphic design firm. Specialized software is required to do what we do, and depending on what is needed, can be an investment of several thousand dollars per employee — which must be updated on a regular basis. Additionally, a graphic design firm needs far more robust hardware than the average user. Our processing power, memory and storage capacity needs can me mind blowing and frequent upgrades are often necessary. Most firms employ highly skilled designers, whom must be paid accordingly. These designers have the talent and experience to develop marketing materials that deliver results quickly and efficiently. All of this allows us to provide our clients the best service at a reasonable price and in a timely manner.

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