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Pricing

You price by experience. If you don't have the experience, you imagine it. For instance, you've laid the job out pretty well, and have a picture (at least in your mind) of what it would take. Now sit down and imagine yourself going through the production process -- an hour to rough up the site layout, an hour to get the homepage right, two hours to rough out the other pages, three hours to get the navigation going, four hours to pull in and dress up the graphics, an hour to tweak the CSS, four hours to wrap it up, two hours of testing, and there ya go -- 18 hours, or 36 hours in real production time. Multiply that by your rate ($60), and offer to do the site for $2160, provided that the client approves the rough layout and agree to pay and additional $60/hour for any changes or enhacements that deviate from the approved layout.

I've use this (or very similar) technique for quoting and billing jobs up to $75,000. -- Jerry Muelver

See also http://smallbusiness.yahoo.com/office.html?s=smallbiz/articles/20010522/ODC23420 -- Is Estimation Burn Costing You Money?

And http://www.btobonline.com/webPriceIndex/index.html -- 2001's median prices for full-site development by Matt Carmichael


Pricing, Take 2

(From kraven, on alt.www.webmaster)

Large companies can easily charge from $50 to $75 per hour for straight HTML. That said, if you are just starting your career, a strong portfolio piece and good word of mouth is worth more to you (for future clients) than money on your first client. Also, like you said, as a beginner you are likely to take much longer than someone with more experience.

If you start at $20/hr (I'm guessing about 13 UK pounds), and take a week to complete the work, that's worth roughly $800. This would include concept, design, images, coding and a meeting with the client.

Another approach is to gauge your work based on their budget. If they want a web site for $500, you can make a very simple recommendation. If they have $50,000 obviously their options are wide open. Don't make the mistake of pitching a $50K web site to someone with a $500 budget. There are still a lot of people out there who think using computers is "easy" and a web site will make them a ton of money but only cost $200. Discussing expectations, ROI, and how the site fits into their current business model when you start, as well as budget and timeline, will make life easier for both you and the client.

I think most developers will agree that managing client expectations and getting paid account for as much as 50% of the job ;-) So be sure to clearly state, in writing, what you are going to deliver, how much it will cost, and when it all comes due.

Generally, anything under $500 I ask for 100% up front. Anything above that, I usually ask for 50% up front. For longer projects with several deployment stages, you might make it 40%, 30%, 30% -- whatever is appropriate. Don't be shy about this. If you are not professional in your money dealings you will be taken advantage of, and you will run into a lot of misunderstandings and arguments because your clients expectations have not been handled.

Remember, the contract does not advantage you over the client. It is a clear agreement that protects you both and lets everyone know exactly what to expect. A good contract is a work order, blueprint, schedule, and payment plan all in one. Pretty much every project I worked on with a good contract was a joy. Every one without was a world of pain.

Be clear, show them some sketches, and create a flow chart to attach to your agreement. Believe me, the hours you put into preparation here can save you days of discussion down the line.

About 8 years ago my boss gave me some invaluable advice when it comes to clients, "under-promise and over-deliver".

Hope that helps!


Billing

Bill your client the way your client expects to be billed. That means getting the procedure reallyreally clear right up front, before the first line of the site spec is written.

On small jobs (Ah!.... those were the days) up to $5000 US, I get 50% down, balance on completion, release source files when paid.

On medium jobs, up to $15,000 US, I get one-third down, balance in locked monthly payments through scheduled completion of the job. Files released on final payment.

On larger jobs (about $75,000 is the most you could handle as a solo act), I divide the total into monthly payments, start work after the first payment is received, turn over files as they are produced.

On open Purchase Order, work-as-needed jobs, I bill monthly for hours of production and expenses. Work stops if there are any glitches in the cash flow. -- Jerry Muelver

Another scheme:

1/2 up front on tiny jobs (<$3000 US), other half on completion or in X number of days (whichever is sooner). This prevents clients from dragging their feet on paying you or working with you to complete the project.
1/3 on up front on small jobs ($3001 - $10,000), 1/3 on working version, 1/3 on released version
1/5 on medium jobs ($10,001 - $30,000), 1/5 per month for four months, regardless of schedule
1/10 on standard jobs ($30,001 - $60,000), payments according to milestones by contract (typically 9 payments)
Nothing down on large jobs (>$60,000), payments according to contract specifications (typically 10 payments), with automatic bail-out of project if any payments are not met.

Contracts

One of the better resources out there for designers when it comes to contracts and protection:

http://www.proposalkit.com/proversion.htm

It is a ZDNET best pick, and one of the best (and overlooked) business tools available for the freelance designer.

It helps with freelance contracts, bidding, billing, time sheets, and presenting information to the client. -- res0a3k5

It ain't free, though -- about $47 US up to $197 US depending on the package you choose.

See also the form at http://www.wilsonweb.com/worksheet/pkg-con.htm and info at http://webdesign.about.com/cs/legalissues/index.htm

Legal forms for other aspects of business at http://www.blumberg.com/

Web design contract samples at:


Marketing

When I put up a new site or create a new service or product, I send a note to those folks in my address book who I think would be interested. Those would be "prospects". My relationship with prospects is that, at minimum, we know of, and tolerate, each other's existence.

Cold calls to strangers, whether email or snailmail or telephone, are an area of mild murkiness, though it looks murkier than it really is. You have to get the word out somehow, if you're going to get any business. The type of business we are talking about involves personal contact, mutual trust, and a relationship of some duration. That indicates mutual respect should be engendered and protected. And =that= means starting out on a socially-acceptable basis for first contact.

Cold calling, like advertising, is a useful technique, much bespattered and maligned by its misuse in the hands of scammers, spammers, and other prickish fauna. Cold calling must be specifically targeted, polite, non-intrusive, and design to build the basis for an on-going professional relationship.

Spam is unsolicited, predictably unwelcome intrusion with an extremely low probability of acceptance by its target.

The murkiness is clarified by intent, as much as by implementation. Jerry Muelver

See also Dan Turner's Free Lance Workshops -- http://freelanceworkshops.com/


What questions do I need to ask the client or what things should be made clear before I begin?

You should get answers to every question that has to be answered in order to permit yourself to sit down and create their site. You should clarify everything that you expect of the client, and everything the client expects of you. All of this should be in writing before you begin working on the site.

Etch this into your brain: EVERY ASSUMPTION WILL BE WRONG.

One question I want to ask is "how much money do you intend to spend", but is this right?

"What is your budget for this project?" is a perfectly reasonable question, and should be asked early, so you can lead the discussion appropriately. There's no sense defining a project that the client cannot afford, or disappointing him later on by providing cheap when he wanted all the bells and whistles and would gladly have paid for 'em.

Keep the named amount in mind, and at that point where the dreams exceed the dollars, make it plain that it's happened, and offer options to reduce the price while keeping all of the vital things and the more attractive of the frilly things.

The few people I've talked to though seem to expect rich 3D graphics at bargin basement prices. It this usually the case?

Yes and no. Usually, the larger the client company, the less this happens -- but sometimes you find yourself stuck with some company man who thinks that if he pinches pennies they'll show up in his paycheck, or who does it just because he's a cheap bastard by nature.

The stock answer: "The thing you're asking for would cost you, oh, about [x] dollars because of the labor expenditure required. Now, if you'd like to consider a more economical option, doing it [this way] would cost you about 1/2[x] dollars. Of course, it won't look nearly as slick as the first idea. Whichever you're more comfortable with is fine with me."

Be sure that where more than one option exists, and especially where they were discussed, that you put into writing which of them is to be provided. Guarantoldja that whenever you discuss a better option and a more economical option, and the client opts for the cheap one, later on he's going to think he opted for the spendier one and will think you're trying to rip him off.

Anyway, any advice would be greatly appreciated.

Here's one that you'll think is counter to good business practice: Always talk to every client on the telephone or in person, and judge on your own terms whether or not you think this person and his company are worth risking that your investment in their project will be lost. Let your "gut instinct" or "intuition" or whatever you want to call it decide whether or not this prospective client is going to be worth the trouble. All the contracts, documentation, attorneys, judges, juries, and hitmen on the planet cannot extract payment from some broke-ass dreamer wannabe, nor can you afford, as a small businessman, to end up in court, even if you're perfectly right and just and aggrieved.

Relax, take all the time you think you need to make a decision, and go with your gut. The rest you can figure out as you go. -- Art Sackett


Resume

If you can't make a go of it on your own, you may have to get a day job. In fact, you may want a day job just to learn the ropes of the business before going out on your own.


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