March 27, 2004 | View Comments (39) | Category: Web Business
Summary: The reason you need to stop shooting yourself in the foot when it comes to running a business.
You pay $2,699 for that new G5 Apple not necessarily for performance reasons, but for the value that you are getting. A $499 Apple does not give you the same perceived value as the $2,699 one. It comes down to perceived value.
You dream of becoming a web designer. You know you have the skills and passion to make beautiful sites that fulfill your goal of making the web a better place. You find a client and you figure it is going to take you a month to do the website. It is time to set the price.
You worry about chasing him away, but you want to make sure you make some money on this. While you are writing your proposal you come up with different estimates. Finally you settle for $2000 and the client accepts. Your client seems pleased with the price. The contract is signed and you are set. Holy crap! You are getting $2000 for something that you enjoy doing. Awesome! Guess what? You undercharged. Badly.
This is your new business and you are passionate about it. You wish to give every one of your clients the professional website they deserve. You start on your own (or dothe projects on the side) because you feel that you are good enough to do so. This is reason enough to understand that you should no longer to be afraid of charging normal rates for your work.
I admit when starting off $2,000 seemed like a great price to me from a client standpoint and my own personal standpoint. I got to create websites, which I loved to do and I was making money from doing it. I had 4 weeks to do the project. In the real world, 4 weeks is the equivalent of 160 hours. If I planned on spending 160 hours working on a project and only charged $2,000, some simple math will show that I was pulling in:
$2000 / 160 hours = $12.50/hr
That comes out to around $24,000 per year. Let us not forget that this is before you pay for taxes, insurance, rent, food, and if you are lucky some entertainment.
You might wonder why anyone would voluntarily set his rate significantly lower than what the customers are willing to pay, but many times this is how we all start off. It is a big mistake. Most do it because we are naive. Time to educate.
Make no mistake that your freelance business is still a business. You have to aim for a profit because it is a business. If you are charging significantly less than the market rate for your service, you are putting the squeeze on yourself. An easy way to find the market rate is by searching web design firms in your area and acting like a potential client. Just ask for their rates.
If you work on a low rate, you are setting yourself up for working at a low rate for the rest of your life.
You start a business believing you are an expert at what you do. Not too many experts in this country make only $24,000. Most customers wish to pay an expert rate because it puts them at ease. Smart customers should understand that a low rate could possibly lead to lower quality of service.
Usually, a customer will already know the ballpark range for prices in your industry. If you catch them off guard with a price that is significantly lower than the average, you risk losing all credibility.
Experts charge an expert rate and amateurs charge an amateur rate.
Asking for a low rate will only get you the clients that are looking for paying the low rate. You do not want these kinds of clients. No matter how much of a bind you are in with money, they will suck you dry of all your energy.
Lower prices make you affordable to people who can not afford expert services.
I speak of this from experience. This was part of the reason for my burnout. I was in constant fear of losing a potential client and did not realize the harm that I was causing myself. Lesson learned.
I did two small (very small) projects for some friends (industry professionals that you guys would know) in which I charged a lower rate then should have been allowed. The reason for this was I wanted to get the feel of working with professionals and these projects were a great learning experience.
What prevents many of us from charging rates that are normal in our industry is that we look at how easy this stuff is for us to do. This does not mean that you should charge less, but that you should charge more. This means that you are becoming experienced.
Keep this in mind:
If nobody is complaining about your current price, they are too low.
Trackback URL: http://9rules.com/cgi-bin/mt/mt-tb.cgi/189
That's so true. I know people who refuse to hire any sort of contractor if they don't charge a premium price. It's not day-to-day bargain hunting, it's about buying a something that keeps your business afloat.
Undercharging not only undermines your individual credibility but may even undermine the credibility of the profession as a whole.
Jack (http://boxofjack.com)
Spot on, except this bit "Usually, a customer will already know the ballpark range for prices in your industry"
Every business I've ever talked to about the cost of website design has expected it to cost less than 1000 dollars and been absolutely shocked when I told them what my fee would be for their simple websites.
A further item of interest regarding prices... one of the best quotes I've seen in a long time... heh. "Just because it's easy for you doesn't mean it can't be hard on your client. They were talking about mercenary work, but it applies to coding just as nicely. :-)
JC (http://thelionsweb.com/weblog)
I've certainly been down this road, although it wasn't so bad for me since otherwise I would have been working in Staples Business Depot or something for $7.50/hr, and it was a small site.
Here's another thing: When I first got started, I volunteered for one organization, and I'm still doing maintenance on the site. I feel that I need to charge them for any future work I do, but I really don't know how to tell them this. I know for a fact that they don't have any kind of budget for their Web site. Has anyone actually been successful in this kind of feat?
Andrew Dunning (http://www.webinspiration.ca/)
JC: You are right in the fact that more small time clients will not understand the price of building a website. When I was writing that part, I think I was looking at more of the clients that already have websites and would understand the need for a higher budget to get quality work done.
Scrivs (http://www.9rules.com/whitespace/)
Andew: You gotta man up and just tell them if they require any more of your services then they need to start paying. I would go back and look at all the work you performed for them and show them, money-wise, everything they have received for free. If they have no budget for a website, then I do not see why they would have one in the first place.
They require money to run whatever (even non-profits need money), so they should understand that you are no different.
To give everyone an idea of what experts may charge for their services check out these examples:
Scrivs (http://www.9rules.com/whitespace/)
The situation I am in at the moment: I graduate in July and am taking a year off in which I'm pretty set on making some money out of something that I've enjoyed doing for free so far. Having had little experience in the commercial world, I am still unclear on how I should go about this.
I have the skills to design a good site, but I'm an upstart with a portfolio limited by my lack of time to devote to just creating designs. I don't want to just continue doing small time low pay jobs though because I feel that my skills are worth more than £100 for a job.
What's difficult is that I look around and see people who aren't aware of the correct price or who base their knowledge on the rates of amateurs that operate in the local area.
I myself don't know what the price should be. So how do I go about breaking through the small time for a short while before heading off to the next stage? Should I charge according to what I think my skills are worth? How should I judge this? And how do I deal with potential clients laughing all the way to their site, designed for them for £50 by their cousin's son?
It's very difficult for me to look at what others have done because it seems to me like wherever I look, it's 13 year olds with Frontpage or else big names with client lists the size of... well, with very long client lists.
As people who are obviously doing this for a living already, I'm sure you have a very different outlook on this than I do but I would appreciate any relevant advise you might wish to share.
And Paul, I appreciate the atmosphere you have created with Whitespace, in that I feel comfortable seeking advise here to fill the whitespace that constitutes my own experience. Thank you.
James (http://james.moap.net/blog/)
James: To start off if you think you have the skills, do you really think your skill are only worth doing for free?
Second, the clients that go off laughing about the cheap site they got, let them laugh. In the end it is you who will be laughing. YOU DO NOT WANT THESE TYPES AS CLIENTS.
It does take some time and hard work to win clients. Even if you have only one or two sites to show, that can be enough to win over some people. I have found that it really comes down to how you present yourself.
Act professional and explain what you will do for them. You do not have to justify your rates. If you show them the value of your services, the rates should speak for themselves.
If you are unsure about how to set your rate here is one simple method:
Your desired salary: $50,000
Your estimated overhead: $25,000
Estimated hours for the year: 2000
Desired profit margin: 10%
$50,000+$25,000 = $75,000 total expenses
$75,000 * .10 = $7,500 desired profit
$75,000 + $7,500 = $82,500 total desired revenue
$82,500/2000 = $41.25 default rate
Those numbers were just used for an example. I am not telling you that you should use those.
Scrivs (http://www.9rules.com/whitespace/)
Here's another way to calculate:
Project Estimator.
That's more for web applications than web design though.
Offers best and worse case scenarios as well as expected. Example:
Screens: 20
Average Screen Complexity: Very Low
Average Developer Skill: High
Hourly Rate: $41.25 (as paul suggested)
nets you (best,expected,worst)
Function Points: 36,54,81
Lines of Code: 539,804,1206
Person Months: 1.4, 2.2, 3.3
Cost (at $41.25/hr) $9,558.87, $14,439.42, $21,924.20
not sure what the schedule/staff bit means. Probably the number of people needed to achieve the project within a reasonable time frame.
JC (http://thelionsweb.com/weblog)
Wow, I am glad this thread came up. I thought people that built sites for 20,000 bucks were nuts, I was like, "Man, I would do that site for 2 grand or something like that". That was before I got a full time job and in the development industry. We have alot of clients and our projects often start at $5,000 and can even go up to $90,000. We do pro-bono work for some non-profits but we often set this at a budget of around $4,000-5,000. Our rate is like $150/hr. But after working in the company and industry, I realize now how much time = money. Clients sometimes have a hard time understanding that as well, but its a business and we have to make a profit.
john
Great post. This is valuable information and a wake-up call for me.
I like your advice about calling up local web design companies and getting estimates. I look at my local market and I can tell you that I am sure they are charging way more than I do and the quality of work they produce is almost embarassing. I mean were talking about nested-table extravaganzas with cheap DW-generated rollovers and a font tag every 2nd line number.
I have to really start getting a foothold in my local market too. I'm tired of taking jobs from clients around the world. The work is steadier than it used to be when I started out but my hometown is full of really badly designed sites from people who just don't have a clue that were in the year 2004 and that Frontpage is actually a *bad* word.
Does anyone have advice to market your skills locally? Take out some ads in the paper, add some flyers in the Saturday edition? How bout just going through the phone book and cold calling everyone who currently has (or doesn't have) a badly designed site and offering a better solution?
Terry (http://www.xdevdesign.com/)
In the market I'm in when I quote a price to local people they are often quite shocked. But then, time = money: I explain to them that I am an expert at what I do, and this price works out to X$ a day. If they want less, go and hire someone who is worth less.
When I doubt, I think this to myself: Is this price worth x many days of my life?
Mike P. (http://www.fiftyfoureleven.com.com/sandbox/weblog/)
Bear in mind though that to achieve 2000 billable hours per year you'll have to work some 2400 - 2800 hours all in all, because things you do to market yourself and to keep pace will not be billable.
Only lawyers get away with these numbers, and then again lawyers are (rest of sentence deleted). Thinking at some 1600 bh/a is far more realistic.
Alexo P
Anybody planning on starting a design biz would do well to pick up Ed Gold's The Business of Graphic Design. It is a really good book for explaining what it takes to run a business successfully, how to set up the business (LLC, LLP, etc.), how to set hourly rates (Scrivs formula was pretty close to Ed's), etc.
Usually, as a freelance designer, you can charge lower than what the going rate is because you are not paying employees (other than your self) and the overhead is usually lower.
At any rate, it is usually good to have a book like that to reference when questions arise.
Jeremy Flint (http://www.jeremyflint.com)
To back-up Alexo, there's no way you'd have 2000 billable hours in a year, unless you're working long nights and weekends, which is a bad way of estimating, let alone bad for your social life :)
9am-5pm is 8 hours (a reasonable working day). 8hrs x 5 days x 48 weeks = 1920hrs.
In that time though, you have to:
- eat lunch
- socialise (let's be reasonable)
- answer emails and phone calls from your clients
- find new clients & business
- keep in contact with your old clients
- learn new skills, refine old skills, experiment
- upgrade computers and software, back-up, archive to CD/DVD
- do all your accounting
- meet with accountants
- go to the bank
- go to the post office
- chat on instant messangers (again, be realistic)
- read blog after blog after blog, typing 400 word comments
- read and respond to 10+ mailing lists
- fix bugs in completed work (usually free in my case, if it was my mistake)
Realistically, I'd estimate my billable hours (based on an 8 hour day) would be more like a maximum of 5-6.
You also have to allow for downtime -- or are we all foolish enough to think we'll have one job start straight after another, with everything on a perfect schedule?
5hrs x 5 days x 48 weeks = 1200 hours
Anyone who thinks they'll get 2000 billable hours a year is going to get a huge shock when their estimated income is nearly halved.
The problem here is that you're running a business -- not just building websites. So every hour you spend not building, you're not earning.
One solution is to get enough work for two people. This way, you can almost tripple the billable hours per day, because the unbillable hours don't change much between 1 and 2 or more people.
You: 5hrs x 5 days x 48 weeks = 1200 hrs
Employee: 7hrs x 5 days x 48 weeks = 1680 hrs
For each additional employee or partner you have enough work for, you're achieving an extra 480 billable hours (480 x $50 = $24k). In a partnership scenario, this is nearly $12k extra income each.
In a scenario where this is an emplyee, you may be paying them a rate much lower than what you're charging, which means you're making money off their hours. You might pocket that $24k for yourself, and skim $10/hr off the top ($10 x 1680 = $16k+).
In which case, you're making a truckload more than what you ever could have by yourself.
Justin French (http://indent.com.au)
Your desired salary: $50,000 Your estimated overhead: $25,000 Estimated hours for the year: 2000 Desired profit margin: 10% $50,000+$25,000 = $75,000 total expenses $75,000 * .10 = $7,500 desired profit $75,000 + $7,500 = $82,500 total desired revenue $82,500/2000 = $41.25 default rate
For me, this is pretty difficult since I'm not sure how I would calculate overheads given I'll be working from home and will have no household bills of my own. So what do I consider here? Software? Hardware repair? What other business expenses are there to consider? Travel?
Also, coming up with a desired salary is tricky. Do I just pick an arbitrary value that I think is sensible. What do I base this on? What others desire, or does this come back to overheads and expenses?
I suppose my goals for this are to earn enough to do some travelling and be left with some extra at the end. I suppose it comes down to how much time I want to devote to work for how much time I want off. And yes, that is probably a matter of personal choice.
Currently I'm thinking out of a total of 14/15 months' break, 4-6 months traveling, a few months for pursuing other goals, like learning to drive, joining an athletics club, etc... and the rest of the time working.
Given the nature of this work, there could feasibly be quite a bit of overlap throughout the year, which complicates matters further. Sure, this is stuff I need to decide for myself, but it just seems very daunting to me. Not that I'm not motivated to do it.
Thanks for all the advice so far.
James (http://james.moap.net/blog/)
Regarding billable hours, it's really difficult but we estimate that the maximum utilisation (posh word for amount of constructive work) is about 70%. Typically you'll be lucky to hit 50%. As for how much to charge the client. My biggest recommendation would be triple any development time estimate. (this only counts if you haven't already put contingency in). Seemed to work pretty well when I was a project manager.
Here is an example of the thoughts I go through when I'm seeing a client (I work for Pollenation Internet, a company myself and a freind set up three years ago). You see a client about a job that they don't have time to plan properly as they need a figure to work out a budget. In this situation you have to build a clients expectations of the industry. You have to inform the client that it would be possible to build a website for �1000. This would involve little interaction with the client, no testing, little copywriting, no reviews, etc, etc. Now you have to explain what typically web companies will charge �10,000 for that same website (assuming little and or basic content management etc). This will get you an account manager and a few meetings and a couple of rounds of review and sign off. Then you have to say if you want extensive content management and sourcing photography and professional copywriting and search optimisation and brand development you will take on a software prodct and integration team, a design house, a brand development marketing house and various people to manage the teams. This could be in excess of �100,000 pounds.
Then you have to explain how much you can save by having a streamlined business and that you can offer the �100,000 pound solution with some compromises for �10,000 pounds. The �10,000 pound solution for �4,000 pound and also explain that the �1,000 solution is like the box at the train stations that prints your business cards.
Does the client realy want to know all of this? Maybe, maybe not. Why not ask them what their budget is and then tell them what they can get for that and what the options are to save money and what luxury options are. If the client won't expose their budget then you can offer the luxury and consumer prices and see why they prefer.
As you can tell I've not solved this one. Maybe a website that publishes standard rates for typical jobs would be good? That may be a good thing for both consumers and companies. Something like 'Which Website company' a review of acceptable prices in a black magic market... Hmmm... yet more ideas for extra curricular projects :-) I might start something like this..
Tim Parkin (http://www.pollenation.net/journal/tim.php)
Without going on a tangent, let me remind everyone that price matters as far as credibility goes.
Take a handcrafted jeweler I used to know, she used to sell her jewelry in an open market for about $5 a necklace, no one bought it. It didn't appear of value quality wise. So, following the advice of a friend, she raised her prices to $25 per necklace the next season. Sales were up 80%. The product had not changed, the perceived value in quality has. Her lifetime guarantee was always there from the beginning, people just realized, hey, maybe she knows what she's doing.
Translate that in to this industry and it's simple, I would never work with a "implementation" or "design" freelancer who charged less than $50/hour. Why? Because I know that this person is probably not doing web design or development full-time. The only way that I know of working full-time at that rate is if they still live with their parents. Now that rate may drift depending on your location... probably the highest in downtown San Francisco, the lowest in Nowheresville USA.
Any freelancer who doesn't take it upon themselves to investigate their average salary for their job/role in their town is doing the industry as a whole a huge disservice by graying the line between the guy who does the work out of his parents garage and has another day job, and those professionals who deliver high quality results at market rates.
You always get what you pay for.
Nick Finck (http://www.digital-web.com)
Tim -
the problem with your idea there is overseas companies come in and run the price down to the sub-$500 range. There are at least a couple of places out there that have those kinds of services (more to hook coders up with clients than anything else) and if you're in the US it simply isn't effective to bid on jobs.
Now, doing it from the buyer's side of thing and subcontracting your work out can be quite effective, if you pick a team that knows what they're doing and communicates effectively (you can usually tell by hte ratings)
I've only done it once, and it was for a personal project I just didn't want to screw with, not a business thing, but for about $100 I got something done that would have taken me a couple of weeks of tedium.
JC (http://thelionsweb.com/weblog)
Now to follow up Justin's post: I am curious to ask, what you define as billable and non-billable. Let me use your list as an example:
non-billable:
- eat lunch
- socialise (let's be reasonable)
- find new clients & business
- do all your accounting
- meet with accountants
- go to the bank
- go to the post office
- chat on instant messangers (again, be realistic)
- read blog after blog after blog, typing 400 word comments
billable:
- answer emails and phone calls from your clients
- keep in contact with your old clients
- learn new skills, refine old skills, experiment*
- upgrade computers and software, back-up, archive to CD/DVD*
- read and respond to 10+ mailing lists*
- fix bugs in completed work*
* - if directly related to the client's project.
...now I am not saying this is how I categorize it as a freelancer, but I am saying this is how the last 5 full-blown web design studios have categorized it. Let's be realistic here. What is and isn't billable is all a matter of perception and ethics.
I would never charge my client for hours I am surfing the web, but I would charge them for hours on the phone with them... why not, it's my time and their employer’s time that is being lost here.
Nick Finck (http://www.digital-web.com)
"You wish to give every one of your clients the professional website they deserve."
That's a problem, because every one of your clients won't be willing to pay for the website they deserve.
This may be a bit off topic, but, *gulp*, sometimes you've either got to do what they'll pay you to do, or go find a higher paying client.
I'm not saying build a crappy non-standard based website, but the extra mile is not free.
There's been so much talk lately about doing this right and doing that right, but what about the economics of it all?
The truth is that not all clients will pay you what the site you can build them is worth.
The trick is knowing where the extra mile starts, and only going there if the money's there.
Mike P. (http://www.fiftyfoureleven.com.com/sandbox/weblog/)
Hmmm... This:
"That's a problem, because every one of your clients won't be willing to pay for the website they deserve."
Should be:
"That's a problem, because not every one of your clients will be willing to pay for the website they deserve."
Mike P. (http://www.fiftyfoureleven.com.com/sandbox/weblog/)
Nick, to follow up:
- answer emails and phone calls from your clients - keep in contact with your old clients - learn new skills, refine old skills, experiment - upgrade computers and software, back-up, archive to CD/DVD - read and respond to 10+ mailing lists - fix bugs in completed work
Sure, at times these items are all billable to the client, but at other times, they are not. Unless you're in high demand, I doubt you will ever be able to charge for quoting, all those little enquiries and emails you type before you get the client. Quoting and pre-project communication in our line of work takes massive ammounts of time.
Of course, you may be able to find a way to justify billing your old and existing clients for some of the above, but it's not all instantly obvious. I've got a reply for each point, but I don't think we need another 400 word post.
I'll just say this, you may find a way to bill some of the above items to some clients some of the time, but in general, these will all come out of your own pocket, unless you have zero morals and ethics.
More to the point, I was just raising awareness of the issues, not suggesting that they NEVER be billable :)
Justin French (http://indent.com.au)
Justin,
I agree and I believe you do have a reply for each of the points. I guess the point I was trying to get across and perhaps did a poor job of it... is that, for example, if you are making a backup for a client's site, why wouldn't you charge them for it? I mean, let's assume that your negotiating the terms before the project has started... why wouldn't backups be a line item. This is just but one of the examples from the list.
It's not that I feel we should nickle and dime our clients, I just believe that there are several tasks that the client would be perfectly happy to pay for (such as backing up their files, this ensures that the code is never lost due to whatever reasons). So long as your up front about what services you charge for and give them the option to decline payment for those services.
With that said I would like to point out that I have worked for employers where I have done all the misc things in the list and they still, at the end of the day, expected me to be 100% billable. Which, in my book is unethical.
On the flip side, I have also worked for employers that signed deals with the client where the client declined to pay for project management but still wanted their site redesign (someone explain to me how that would be possible?).
So you can see there are pros and cons for charging and not charging for these services. Yes, there are going to be hours of the day where you are not billable.. heck, the state I live in requires at least 2 15 minute breaks for every 8 hours of work. That can't be billable. And as you said, quoting and estimate time is often not billable. I supect that 75% or so billable is doing pretty good.
Anyway, I could go on about some of the poor ethics I have seen within this industry but fearing that I am reaching that 400 word mark you mentioned, I will hold my ranting back ;)
Nick Finck (http://www.digital-web.com)
In all honesty, I think it would be wrong to bill a client to backup their files. I mean, at my company, we have so many clients and so many things going on in our system, we do entire system backups quite occasionally. I guess if you have a small clientel list and you never back anything up, then I guess it would be an extra service, but if you are hosting their site or you have all their stuff on your development server, its seems logical that you would back that information up, and that would include clients sites/files.
Point is, if we don't backup the files, and a crash happens for whatever reason, we are up shit creek without a paddle with our clients, because they expect us to take care of them, and if their site goes down, we don't get paid.
just my 2 cents on that issue.
on another note, what really irks me about myself is that I find days where I feel like I am busy and I feel like I am working hard, but at the end of the day, I only bill like 5 hours, and I Just sometimes sit there after work wondering where in the hell the other 3 hours went. I occasionally talk on forums, but there is no way when added up that it reaches any more then 45 minutes or so.
Anyone else find themselves kinda lost with time when billing projects?
Bryan (http://www.gamecubecheats.info)
One suggestion I have is that if a client questions your price, be prepared to show them your qualities that set them aside from their 13 year old cousin.
Let me aid my fellow readers with an approach I use. We've got Windows and Mac, and then we have several browsers on both, and then several versions (most of which suck) for each browser. When I design a site I have at least half a dozen browsers open on typically a PC/MAC and Linux box. What code does in any one of those may absolutely destroy the rest of the site in any or all the other scenarios.
What we do is comparable to what architects do with buildings. We on the other hand work with media and not thousand feet falling hazards. While unless you live with a very unhappy wife or anywhere in New Jersey, health is not a concern for your job. Browser compatibility is. If that's not enough alone to justify...say a $5,000/us 1 month job for a site with a few semi-advanced features for someone looking for a professional, then perhaps you should ask how serious your client is about doing business on the web.
Need more suggestions? How about being able to hit a bookmark and seeing where their customers are coming from and easily doubling their traffic with effective advertising? Seeing the avg. staying time on any particular document. Who is interested/buying what? 100 people look at page 6, 60 leave, 20 browse to other pages, 20 stay and read and probably compare to other sites, 4 end up buying. My personal site gets 300 visits (not hits) a day. Of course, I'm not into web sales, so I'm assuming on the low end.
Anyway, nice reading here and I like the site as well. Have fun ^.^
John Bilicki III (http://www.jabcreations.com)
Nick, Nick, Nick... you're looking at it the wrong way!
You don't charge for backups. Backups are free and keep your arse covered. It's the time-consuming *restoration* of those backups you charge for. "Nice data you got there... shame if anything were to happen to it."
heh.
All kidding aside, that *is* how a lot of hosting companies and service providers work... they do regular nightly backups on the entire servers, but if you want to restore a particular site or directory or something, they're going to charge you a fee to dig out the tape and restore that data.
BTW, it's a good idea to use something like SourceSafe, where your code is archived and versioned... then you can just backup the sourcesafe db and have everything.
That reminds me... does anyone know of a good way to do unmanned backups of a MySQL database in excess of 100 megs? I have one, and it's a major pain to backup manually, so I don't do it very often... and I'd be SOL if it failed on me (not really, my host backs up the whole server nightly, but never trust any backup you didn't make yourself and all that)
JC (http://thelionsweb.com/weblog)
You know, you just touched on every reason I want out of the freelance business. I was afraid of overcharging my clients, so I undercharged instead - sometimes I felt I had to undercharge to win the client because I needed the money so badly. Then I found myself doing way too much work for way too little pay with clients that are less than desirable. I wish you had written this about 9 months ago :)
theresa (http://www.dandelionwine.org)
It's a sad trap that everyone has to battle with in this biz. I hope that schools put a lot of emphasis on this stuff since it is so critical to survival - not to mention, holding onto ones sanity. When I was still freelancing, my biggest difficulties were between the trap of undercharging clients and lining up quality clients. If your invoices don't pay for the time and expense of networking, and marketing yourself, etc., you simply won't survive. At that rate, the best that can happen is that you restrain the inevitable and stay in business for a while.
Justin (http://bluealpha.com)
Ok, let's be honest: a lot of designers do pro bono work, whether they're newbies looking to create their portfolios or veterans that want the creative latitude to expand them. And if we're lucky, it's also for a good cause or friend that could really use our skills. So what to do?
I have a friend with a solution that seems to have worked really well for her: she charges pro bono clients, then waives their fees. She gives them an itemized list of costs and fees just like she would a paying client, but just adds "costs waived" next to each line item, so then they can walk through the list to see all the work it took and look at the bottom of the page to see the total it would have cost them otherwise. This goes a long way towards treating them with the respect a client deserves (avoiding the subconscious "you should be thankful for your web presence" message you can send out when you're tired :) and that respect is paid back by them when they see what it takes for their "free" site.
She also makes them sign a contract that says the site is free as long as no future design changes are made without going through her first, otherwise the fees are reinstituted and they owe her money, since she's doing this as a pro bono charity work that will increase her portfolio and it's not worth it to her if they're willing to trash all of her man hours on the project by interjecting their Frontpage junk markup and clip art designs. She's perfectly free to pass on any work if they are too much of a burden, she just gets advance notice and first crack at any additional work. It's just polite common sense and it would be nice if you didn't have to write it down, but hey.
Al Abut (http://alabut.com/)
... and never work for friends (or friends of friends) for no money. It always comes back to roast your chestnuts at some point.
Malarkey (http://www.malarkey.co.uk)
Al, your friend is a smart woman. Not only does that show how much her work is worth, it also allows her to have an itemized list and paperwork she can use to put towards her taxes—since donations are tax-deductible (at least here in Canada)
Lea (http://xox.lealea.net/01/)
Lea -
Maybe Canada's nicer than the US, but in the US, donations of services are not tax deductible. I wish they were. My accountant won't let me, and I do about 10K worth of pro bono work a year. Won't let the videographer I know deduct anything but the actual expenses for the final videos or dvds he gives them, either... a whopping $3-$5 dollars a pop.
Now, if you're doing your taxes yourself, you could probably try it and plead ignorance when the IRS comes knocking, but a real accountant will smile and say "nice try"
At least mine does. She says that alot. But she did get me an extra $1k back above and beyond what her associate figured (no experience with biz taxes) so I can't complain too much.
JC (http://thelionsweb.com/weblog)
We do something similar to the woman Al knows. Usually when we do a pro bono site, at the end, we send them an invoice that shows the costs incurred for the project, but its more for their financial bookkeeping (the probono organization), but it shows them how much money was allocated across the site. However, I like the idea behind the woman having a list of items that she goes through and marks "fee waived".
Bryan (http://www.gamecubecheats.info)
Scrivs I have just bookmarked this post for future reference, as I can see it will be invaluable to read and re-read when I plan to branch out on my own later this year.
Thankyou thankyou thankyou.
mattymcg (http://www.opinios.com)
Ok, one last short comment... I have yet to find a single host provider that offered backing up my website on a regular basis that was *not* a service I had to pay for.
Think your host does? prove it to me. Ask them right now to pull a file out of backup you know you modified yesterday. Ask them for friday's version of the file... see how far it gets you. ;)
To me if it's an expence, it needs to be accounted for. I am not saying I would charge a client $400 if it cost that much for the service... I am saying it is $400/number of clients=cost of service to a specific client... give or take for project size and number of files.
Nick Finck (http://www.digital-web.com)
Nick -
You should probably find a better host then. Do you understand how this stuff works? it's common sense. The hosting company backs up the servers on a nightly basis. Not your site specifically. The entire server. Maybe only a diff backup, maybe a complete one. CYA and all that. Never good to have 500 very angry clients because your server lost all their data. Not all of them will be willing to restore backups of your particular data, true, and many that do will charge for the service. But they do keep backups, and you can wink all you want at the idea, but it's ridiculous to assume otherwise if you have a reputable host. General practice is to keep 7 days and a month's worth of Fridays (or sundays, whatever they happen to prefer), and to do a special backup before making any config changes to the server.
Hosts that will not back up are either very low end, or very high end. On the very high end dedicated server, you're managing the server yourself and they'll usually sell you a backup hard drive or three. The very low end, well, you get what you pay for.
JC (http://thelionsweb.com/weblog)
A long time ago I dealt with a small hosting company that had formed a relationship with my company before I became a partner. One night their servers were actually stolen, probably an inside job. Not only did the host not have an offsite backup, but no records of passwords, usernames, etc - nothing. As the developer, and the champion of their web presence, if I had failed to produce a copy of each website for each client I would have been hung out to dry by my clients.
There's a limit to what responsibility I will take on, but backups are important for historical, and business reasons.
I can't speak for anyone else, but my clients have always expected at least a basic backup of their site at launch day. I swear that if a host ever puts me on the spot again, I might not have backups of all logs, databases, etc, but I'll at least be able to quickly produce copies of the site as it was when I worked on it last. It is another layer of protection that I give a client, knowing that they will never know its full value except in extreme circumstances.
Justin (http://bluealpha.com)
Exactly, Justin. The last thing I do when the site is officially "finished" is present the client with a CD on which I have burned the entire website and a dump of the SQL, both with and without table creation code, from that day. I do another for myself and drop it in my safe deposit box, in case they lose theirs.
Of course, in a database driven site that doesn't cover your content down the line, but it's a start, and you can give them a tool to back up their DB code to a dump file, if they want to pay for it.
As for external backups, I can't speak for my web host on that one (I think they store the external backups for the east coast site in the midwest site and vice versa though), but I know we put ours in a bank vault about half an hour away from the data center, and are looking at even more secure realtime things.
JC (http://thelionsweb.com/weblog)
Keep track of comments to all entries with the Comments Feed
©2003-06 9rules, Inc. | Thoughts Feed | Notes Feed
Amazon Stores: Powertools | Jewelry | Books | Health | Landscaping | Kitchen | Movies
#1
Here's one other point:
It is bad for the industry as a whole
When you undercharge a client, they may assume that this is the going rate. Now say they refer someone to you, as they liked the work you did on their website, and also told this person what you charged. This new potential client is going to expect a similar price for their own site. Alternately, say you are speaking with a potential client, and give them a professional price. They come back at you with something like: "But my friend just got a site created for $xxxx! Why are you so expensive?" You silently curse the friend's web developer, and proceed to explain why they should pay your rates.
As you said, we are professionals - this isn't grunt labor. How many hours a year do you spend simply keeping up on the rapidly developing technology powering the web? Let's face it, if you only want to make $24,000 a year, there are other easier, less time-consuming jobs that you could do. As a freelancer, not only do you need technical skills, but also creative skills. Not only do you spend all the time developing the front and back ends for the site, but you also spend the time meeting with the clients. All of these are factors that you need to figure into the price.
Ryan Brill (http://www.ryanbrill.com/)