October 16, 2003 | View Comments (12) | Category: Web Business
Summary: When asking someone who has been in the freelance web design business for a while on some advice for pricing your work, they are usually quick to throw out some advice on what they do. Sometimes they will tell you...
When asking someone who has been in the freelance web design business for a while on some advice for pricing your work, they are usually quick to throw out some advice on what they do. Sometimes they will tell you to charge no less than $XXXX or to just go with your instincts. As a beginner it definitely was not easy figuring out what to charge my clients, especially being young.
There were a couple of articles on Sitepoint here that helped me get started. It is nice to think that you should start yourself off with a $60,000 salary only because either that is what you were getting paid at your job or that is what Salary.com says. However, if you are just beginning it might be a good idea to get the business first. This is what I have done with my first two clients. Both prices that I have given them were below what I would expect to charge normally. There are a couple of reasons for this.
One client and I have worked out a plan to actually generate more business for myself through his website. This is not someone promising me that they will refer business my way (which is something I am sure many clients will try to tell you to lower the costs), but this is actually a sound business decision I made. If you actually do a good job with their site anyways they should refer you based on that.
My second client is given a lower price because his site is in a different industry where I might not have another chance to get in and if it proves successful can be very high profile site. Also he is a very interesting person to work with (details on this project later).
I guess what I am trying to say is that I used the Sitepoint article as a reference, but not the law. If anything it was more of a way to determine what the max I would charge would be. There are other factors that can't be included in these formulas like potential for new business from this project and also if it will open the doors to other industries. However, I will tell you that if you feel you are going too low then you probably are. If you feel it is not worth your time to develop a website (which can be very stressful), then don't do it.
Going out on your own you may feel that you have to offer the cheapest price, but many people I have dealt with so far seem to respect you a little more if you give them a realistic price along with justification on why the price is the way it is. Many times these people have already been burnt by $500 developers so they are willing to pay the premium to get the job done right. I would also suggest staying away from asking what their budget is because to me that just give the wrong impression like you are looking to milk them. If they do not have the money for your services you will find that out once you hand them the proposal and maybe you can negotiate the price after.
This company is still young, but hopefully this is advice I could follow from years on end. After a couple of more projects I will be sure to update everyone on what I have learned. I think I definitely have to gain a better grasp of how long a project will take me to complete. That is very important in determining the price. Until then I would love to hear everyone else's ideas.
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oh... (god I leave long comments!) forgot to add... on the asking budget thing...
general rule... the bigger the company, the more likely the chance you should ask the budget. A company the size of mine, if you don't ask the projects budget, they'll consider you an amateur. You need to know the budget to know if you can handle the job and so forth. Dancing around is a waste of time.
Just understand that they're probably lying through their teeth ABOUT that budget by 20% or so, b ut it doesn't matter because it includes lots of stuff that isn't you.
JC (http://thelionsweb.com/weblog)
Haha, good ol salary.com. In regards to lower pricing, both of my clients have been told and understand that this is lower than what I would offer and that the price is confidential between us.
Budget: I agree that it is a good idea to feel them out and try to figure out their budget. Maybe for larger projects it might be okay to just blatantly ask what the budget is just to let them know that you can do it under that budget or if they would have to raise it up some.
Consistency will be key for reputation. Also I think it is important to set a payment schedule, be it half now and half when finished or whatever. You should also have parts in the contracts stating that you own the rights to the site/design whatever until payments has been complete, or something along those lines.
I like the builder example. Pretty much along the lines of what I tell everyone. The "how much for a website" question doesn't work until you understand what they want. How much for a car? You know.
Scrivs (http://www.9rules.com/whitespace/)
Damn, you beat me to the budget comment. I guess I was taking too long typing my stuff up.
Scrivs (http://www.9rules.com/whitespace/)
You might find this book to be of use. The Internet Law and Business Handbook. It goes into a lot of detail on things like copyright and keeping yourself covered and how to do contracts and so on. It also comes with a floppy disk that has some pretty good sample legal documents on it, including a contract. I suggest modifying the contract a bit because it's a little too client-centric for my taste.
As for a payment schedule, it's funny... I always try to set one, and the client always says... "can't I just pay you up front?"
JC (http://www.thelionsweb.com/weblog)
Payment: Must be nice. Rich clients you got there ;)
I purchased a Propsal Kit software thing at
http://www.proposalkit.com
and although everything in there is ugly the information has proved invaluable. I just really had to make some minor adjustments in the words and of course the look of everything.
Scrivs (http://www.9rules.com/whitespace/)
Oh... I almost bought that but it was more than I wanted to spend so I bought that other book instead. Is it worth buying?
JC (http://www.thelionsweb.com/weblog)
Based on my short experience I would recommend it. Its got good contracts and different size proposals which helped to give me some ideas. I haven't gone into the other documents yet since I haven't had a need for them.
Scrivs (http://www.9rules.com/whitespace/)
Pro. I was so worried about missing out on something that I just went for all of it. Compulsive. Me? Nah...well...maybe.
Scrivs (http://www.9rules.com/whitespace/)
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#1
"I would also suggest staying away from asking what their budget is because to me that just give the wrong impression like you are looking to milk them."
On the one hand, this is true. But on the other hand, you're going to be pretty pissed off if you work 10 hours on a proposal and quote them a few grand and they choke and say there's no way they're spending more than $150.
One way to do it is to feel them out, not for their budget, but for how much research they've done. The more research they've done on it, the better the client is, and the more likely they won't throw you out when they learn that your fees are in 4 figures.
As for starting off cheap... that can bite you in the ass. Make sure you qualify that price with "I'll only agree to this price if you promise NOT to tell anyone what you paid, and I'm only doing this because I need more sites in my portfolio" or something like that. Maybe ask them to give a different dollar amount and call it the "discounted price" you offered them. If not, a nondisclosure agreement is a good thing. It's a little over the top, but it'll help them keep their yaps shut when their buddy who wants a website asks them how much they paid after you quoted him $5000.
You need to keep a consistant pricing scheme for sites of comparable complexity as much as you can... helps keep your reputation clean when people don't find out they were charged vastly differing amounts of money. Just make sure you specify that the price is adjusted for the level of complexity in the project. At least, if you think they'll remember that.
And a fond memory... when I did a builder's website... he asked... "how much to build me a website"
I asked... "how much to build me a house?"
he said... "well, it depends on what you want"
I nodded. He said. "oh. Gotcha." and we settled down for a lengthy discussion. I didn't charge them as much as I might have, but he also owns my apartment complex and gave me a break on the rent.
As for salary.com, god I wish that was accurate. I've never spoken to anyone who makes the kind of money salary.com quotes. Not since the crash anyway. I think maybe they use aggregate records including the 90s or something.
JC (http://thelionsweb.com/weblog)