Pricing web development and design services is one of the hardest parts of running a digital studio or freelancing business. Because, as many people have said already, new developers usually overprice and scare their customers or underpay themselves and live in regret. By the end of the blog, you will know how to avoid making these mistakes and charge accordingly to your skills and living expenses.
The Value of Web Services
Before you start making prices, take a moment to understand what you offer and who you are offering to. This will help you determine what you should charge and why. If you are confident in your skills and what you offer, it’ll be easier to stack up against other web developers, making you more confident in what to price your services. The first way is by knowing the value of your offer.
What’s included: How many pages are in your website? A website with more pages will cost more than a basic website with 3 or 4 pages. Also, focus on the quality of the pages instead of the quantity. How much content and time did you put into it? Was it made with hard work and love, or did it use a simple template? All of these things add to your overall value.
Experience: Your experience in building websites affects your pricing plans. Let’s say you have a decade of experience. Your services will be more expensive because you have more knowledge in this field from taking more classes and working with clients regularly. A longer experience also builds trust; they will trust you to provide them with the perfect website.
Target Audience and Projects
Figure out who you are offering your services to. What is the budget of your target audience? If you are offering to individuals and new small businesses, their budgets will be lower than those of big companies. The type of client you attract will give you clues on where to position your pricing.
Here is how to price types of clients
- Specialized Additions: Think of the certain tools you might have to implement in the website. For example, a financial advisor will appreciate a tax calculator tool on their site, but ask beforehand. This instance, where extra time and coding are needed, will reflect on your final pricing.
- Client’s Passion: A passionate client is likely to invest more in a professional design because they are putting all their time and effort into growing their business. A client who is doing this as a side hustle will have less of a budget for the project.
Projects
There are two types of charging your client. One way is through an hourly rate, where you pay for a certain amount of time you work. Another is project-based-pricing, where you create a structure of everything you will do on the website, estimate the price, and tell the client. They both have their own pros and cons; let’s talk about them.
Hourly Rate
This is the simplest to understand; you set an hourly rate and charge based on the hours you worked on the project. The downside is, its trickly to give an upfront estimate of the project’s timeline and cost. If you are going with this method, be confident to complete the project in the estimated time you gave your client.
Project-Based Pricing
This means you will take on one flat fee for the project, which can also kick you in the butt if done wrong. This method works best for projects that are laid out perfectly, as you are able to estimate the total cost based on the work. This model helps you manage your time and resources better, but reduces flexibility. It will be harder to adjust the price once it starts, but if you want, try having things like late fees or add-on fees beforehand in the contract.
Cost of living
Find out how much money you need to live comfortably. Other web developers have their own price set because it works for their living conditions, but this won’t apply to you because you are different. Consider factors such as: cost of your workplace, utility cost, food and grocery, medical cost, insurance, and services you use for coding. Add up everything up to estimate your yearly expenses.
Here is a formula from Wix Studio:
- Monthly expenses and taxes = $6,000
- You want a profit each month of = $4,000
- Your gross income needs to be = $6,000 + $4,000 = $10,000
- Your workdays each month = 20 days
- Your daily income needs to be = $10,000 / 20 = $500
- By working an 8-hour day, your hourly rate is = $62.50
You can replace the numbers with your own living conditions and expenses
Let’s use another example where your yearly expenses are $40,000. You would need to consider taxes; your estimated yearly income would be off. It’s a common practice to have a tax rate from 25-35%, which also depends on where you live. If our income goal is $40,000 and our tax rate is 30%, then you’ll actually want to have an income goal of $57,500 becaus after 3-% taxes, it would be $40,250. That means including taxes, you would need to make a gross income of $57,.500.
Conclusion
After you’ve decided on the value of your work, your target audience, the way of charging, and your cost of living. You will have a good understanding of how much to price your services. I hope this blog helped you be on the track of what price would work the best for you. As you keep working, pricing services will come naturally to you, and maybe you’ll be able to pass the knowledge down to other beginners.