When you start a business developing websites, one of the first questions you will be asked is ‘How much do you charge?’ Your first response will often be ‘It depends’. The difficulty is in arriving at an answer that keeps the customer happy and feeds your family. This may seem straightforward at first, however there are a number of factors that need to be taken into account. Once you have established a method of applying prices that suits you, this will free your thought process from this burden of costing and you can focus on developing top quality websites.
Aim for a particular market, and get to know your customers. Some will be able to pay high fees, and others will be living a more frugal life. You have to take an active decision as to which pond you are swimming in. Clients requesting website developments will range from the charity run from the house next door, to multinational corporations who are outsourcing for economic reasons. Select your target client group, and don’t overstretch your capabilities.
Establish objective pricing rules at the outset. There are many variables to consider, but if you can identify fixed rates for frequently occurring tasks, life will be simpler for both you and your customers. These rates might be based on a cost per hour of work, the cost per page, the cost of a database or cost of personalized graphics.
The cost of creating a website is very dependent on the time spent creating graphics and user interaction. The customer’s expectations can vary greatly, and you may find your estimate is shockingly high or ridiculously low depending on who the client is. A useful technique for establishing a common understanding is to ask the client what their budget is. If it is reasonable, offer to work to that budget. You know what they are expecting to spend, and you can cut your cloth accordingly.
Having indentified the client requirements and started work, it is important to keep control of the project. Give yourself a fixed development time, and stick to it. It’s easy to spend forever perfecting an image or trying different permutations in page structure. The client will not usually appreciate the time you have spent agonizing over the width of a particular image or navigation bar. Get used to working to your own deadlines.
Don’t price work low just to have something to do. There is no advantage in working for nothing. When it’s financially better to work in a supermarket, work in a supermarket. This is especially true at the start of business development when you want to establish a reputation and gain market share. Unfortunately if you get a reputation for developing cheap websites, this will haunt you later on.
When the initial project has been completed, you will hopefully have started an ongoing relationship with the client. Their next request will be for ongoing maintenance. In my opinion, it is much better to charge for work on an item-by-item basis rather than have an annual contract. In its simplest format, where you charge a fixed fee for maintenance and upgrade, you will be effectively writing a blank check. Unless you have conditions and a flexible pricing structure built in, you could well be plagued by trivial requests for tiny, but very frequent, updates. You may have a greater risk of the client walking away, but I believe it is a more honest relationship for both parties, and you will avoid arguments about the terms of the contract and the need to try and renegotiate it halfway through the year.
A major factor in having a good relationship with your client is to be open and honest about costs and services offered at all times. A quick money grab will lead to a lot of bad publicity and lower prospects of future work. Treat your customers well, provide good value for money and your business will establish a reputation that will be worth more than all the expensive advertising and special offers you can devise.
You are quite right. Proper planning is required in every step we take, whether we are designing a website or charge its fees from clients. The solutions you provided are really good. We must know the budget of our clients so that we can work accordingly and both parties are happy and satisfied at the end of the day.
Nice piece of advice. It is always confused as to what should be asked for when it comes to pricing. Its the toughest part of the negotiation process. For this one should be well aware of the market rates and the level of services/designs others are providing to place in a good position to win the contract.
That is so true Harvey. As an author and business man, I can relate to how you said “The client will not usually appreciate the time you have spent agonizing over the width of a particular image or navigation bar. Get used to working to your own deadlines”. I hope more people discover your blog because you really know what you’re talking about. Can’t wait to read more from you!