"What should I charge for doing web development work?" I
am usually a bit at a loss for the best way to answer a question like that and
so will often give an answer something like "everything you can get away with;
not a penny less, and, if you’re wise, not a penny more." Of course that’s not
particularly helpful, but then it’s difficult to provide a truly useful answer
to that question. Here then, I will try to do a little better.
It is still a very tough question, and it’s impossible to provide a numerical
answer that would have any real meaning in all the parts of the world that are
graced by our readership. Instead, I have tried to think up a method for
deriving an answer that will hopefully provide some guidance, and enable you to
come up with a good number yourself.
There are four elements that go into a price: time, materials, overhead and
mark-up. I think it will be easiest to look at each of these in reverse order.
Note that these elements are for your own use only; I wouldn’t recommend sharing
your calculations with your clients!
If you want to include a mark-up, remember these tips: apply a uniform
percentage across all the other elements; don’t be greedy or you’ll lose
business; remember that this is a great place for you to give something away in
the form of a discount.
Overhead is actually fairly easy to figure out! Take your monthly costs and
divide them by your time. That’s your overhead! For example, suppose your office
space, utilities, phone, internet connection, insurance etc. adds to 2000.00
each month and you work 50 hours a week on your web development. Assuming four
weeks to a month, your overhead is 2000/200, or 10 per hour (in whatever
currency you are calculating!) It is, of course, possible to get very
sophisticated with overhead calculations, taking into account time required for
education, time taken or lost for holidays, vacation and sickness, etc., but
these sorts of calculations are usually most applicable within corporations.
An individual can usually adapt themselves to their income patterns or make
adjustments as necessary, should web development become their primary income.
Materials are probably non existent unless you choose to use stock photos that
include licensing fees, or you wish to consider hosting cost as a "material"
cost. Use as close to actual cost as you can, applying your mark-up, if any.
Of course, you could break down the cost of your computer over time, together
with its maintenance, and add that here.
Time is what you are selling. Your time is the true value in your website
development effort. Consider what is a reasonable amount for your time on an
hourly basis. Again, don’t be greedy, but rather be as realistic as you can.
What could you earn for your work as an employee of a company? As a freelancer,
your time would earn a little more than you would be paid as an employee because
employers provide other benefits to their employees. When selling your time
remember that this fee is all you are going to get for your time, and be fair to
yourself as well as to your client.
Let’s say that you have arrived at an hourly rate of 15.00, that there are no
materials involved, that your overhead came to 10.00 and that your mark-up
decision was 10%. 10.00 + 15.00 = 25.00, plus 10% is 27.50. There is your hourly
rate. That amount times the number of hours you work (plus the materials — in
this case zero, with mark-up: still zero) is the value of your effort and the
amount you should charge.
If your client wants to know ahead of time what the total is going to be, you
will have to estimate your time. To do that you will need to have the client
give you written, detailed specifications for the site. When you then present
your estimate you will have to specify how you will handle changes or variances
from the original specifications that occur. The chances of changes coming along
are usually very high, and it is not uncommon for the total changes to involve
more time than you originally estimated for the entire project. Be certain that
you clearly handle this issue with your client in advance of starting work; it
has a very large potential area for dissatisfaction in either direction of not
handled properly.
Finally. keep an accurate and honest log of your work time. This is how you will
get good at estimating your time requirements. It’s also how you will justify
your charges to your client, if you are billing on a time basis. Not only will
your estimating improve as you build experience, so too will your ability to
fine tune your rate to the market in which you are selling. Stick to your
formula. Don’t suddenly start making guesses at the final number. You need to
know the elements so that you can adjust them as they change and see the effect
on your final number.
Just as your estimating skills improve, so too will your coding skills improve,
especially as you continue to use HTML Goodies to pick up new technology skills
and advice, and Goodies To Go to keep on top of things! As this happens, your
time will become more valuable — but then, you already know how to adjust for
that!!