One of the first and most important
issues a freelance or small business web designer must address is how much to
charge for their services. If you charge too much, you won't be competitive. If
you charge too little, you won't survive.
So how do you answer that oft-asked
question, "How much does a web site cost?". Here are some guidelines that will
help you determine reasonable and realistic prices for your web work.
When you are just starting out, you are
not sure what to charge due to your inexperience. In order to run a profitable
web design business, you must charge enough to make a profit, and enough to
reach your goals and business plan. How much do you want to be paid? You need
to make sure you don't underquote and lose money from the client you take on.
You need to make sure you don't overquote and lose the client entirely. You need
to make sure you are paid what you are really worth.
If you charge cheap, you'll attract
cheap. Not only that, but if you charge cheap you may seem too good to be true.
You really don't want cheap clients. Not only will they haggle with you with
every single invoice, they also tend to be very picky and will keep asking you
for numerous adjustments which will drag each project forever. There is nothing
worse than a $1,000 website turning into a 5 month project. You want clients who
are very comfortable in paying for your services, who know what they want.
On the other hand, you don't want to
charge too much. Not only may the clients shop around for the best rate, but
also when you charge something that just seems outrageous, people will know. You
need to charge a fair market price, which will attract the right
clients.
Fixed Pricing
Use fixed pricing for all new projects.
This type of work involves starting from scratch and developing new websites or
providing new designs.
Hourly Rates
Use hourly rates for corrective work or
maintenance work. If a client already has a website and has asked you to make
changes, then charge hourly for your services.
When putting a proposal together for a
new client, always try to calculate the amount of time involved to complete the
project.
Investigate The Marketplace
Find out what web designers in your area
are charging. The most accurate way for you to determine your rate is to see
what successful web design companies in your area are charging.
Another approach is to get a detailed
list of the work the client needs from you, send it to an outsourced team, and
see how much they will charge. When you quote your client, quote at least double
this, as outsourcing is a lot cheaper than what you would have normally
charged.
Example of fixed pricing project: Let's
say a client wants a 5 page website. Let's assume a reasonable rate for this
would be $1,000. Your outsourced team may create this website for you for $70
per page, or $100 per page. Charge at least double ($350 x 2 = $700 or
$500 x 2=$1,000). Though this may result
in underquoting, you likely won't be underquoting by much. As you can see in the
second scenario, your quote would be just around the assumed market price. By
charging twice what your costs are, you will ensure you are making a decent
profit from each project, where your profit from each project is always 100%.
When You Should Ask For The
Money
Always ask for 50% upfront before you
begin the project. This will ensure that your client has the money and you are
not left in the dark when the work is done and it's time to get paid. If you are
outsourcing, this should also ensure that at least your costs are covered if
your client just does not pay up. As to the remaining 50%, there are two
approaches.
The first way is to work in milestone
payments. For instance, once the work is half done, ask for another 25% of the
balance. Then, once the project is fully completed and the client is satisfied,
ask for the remaining 25%. Of course you should communicate to your client all
payment arrangements before the project begins, but after the client has agreed
to start the project with you.
The second way to charge that remaining
50% at the completion of the project, but prior to delivery and installation of
the website. This will communicate to the client that you care about the
quality of your work, and not just about their money. Further, many people are
no comfortable in paying 75% of the fees before they actually see the work has
been successfully completed.
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