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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