Before any designer can begin a new project he or she first needs to understand exactly what it is that will be designed, where it will be used and who the target audience for that design is. in my experience, I have found that a phone call to the client (where practical) is the most efficient means of accomplishing this needs assessment. during this phone call, I am specifically looking to find:

• What format will the design take? (black & white, full color, 2-color, etc.)
• Where will it be used? (print media, video, fax/e-mail transmission, etc.)
• Who is the likely target audience? (age, sex, income, etc.)

  Note:
  You may also find that this is an excellent opportunity to "cross-sell" your client on other services you may offer. for example, a client looking for a faxable version of his logo may not realize that you can also transform that logo into a 3d model capable of being used in sales videos, brochure advertising, etc. I try not to push these services, just put the idea in the client's head that these services are available, either now -- or later, down the road. you might be suprised at how much repeat business you can get from this approach.
  
  ...Also don't be afraid to try and upgrade your client into higher quality output. for example, I have an excellent source for full color business cards (@ $75.00 per 1,000 cards). a client might not be aware that for just a few dollars more than the 2-color cards they were looking for, they can receive a much better final product.

Once I feel that I have a firm understanding of the scope of the project, I generally lay out a proposed timetable and discuss fees with my client. I normally like to work hourly, but I am sensitive to a client's concerns regarding this issue. if I sense hesitancy on my client's part, I will either offer to cap the price at a reasonable level, or when pressed will quote a flat rate -- trying to take into account the size and scope of the entire project project. For example, I might lower my normal pricing on logo design when I know upfront that I will also be laying out business cards and letterhead. Pricing is always a very sensitive issue and one must balance the hope for repeat business with the reality that at too low a price a project that drags on and on with multiple revisions might just not be profitable. Once all of the preliminary details have been dispensed with, it is time to begin putting pen/pencil to paper... Yes, I like to sketch out several designs before I start creating images on the PC. The beauty of this is that I'm able to record the ideas/inspirations as the occur, rather than waiting for a time when I'm behind the keyboard. Now begins the collaborative part of the project; that part of the project where the Designer and Client must work together to bring about the final design.