price of a web site

Question

I am looking into starting a project on the side building web pages for people and businesses. This will not be my primary job (unless demand far exceeds my expectations) I am wondering what type of pricing model I should adopt that will be fair. Is a flat price by site or by page better or should I charge by the hour?

Answer 1

Look around at other businesses/people in your area that offer the same services and try to match their price. You can go a little below. However, in many cases you don't want to go too low, because they think less pay = bad results, and also because you will make less money then what you can potentially be making.

I would definitely say to have a custom price for each site depening on the scope. Draw up a project plan before hand with the customer so you are sure of what they want, and price it on how long you think the project will take. Some customers may just want 10-15 pages. Others may want hundreds. Offering a flat rate is a sure way to get the customer to ask for more than they want or need, just to get more for their money.

Answer 2

Most of the freelance, on-the-side web designers I know charge by the hour. That way, they basically get paid more if they are required to make more pages, and if the customer changes the requirements in the middle of the project, the developer isn't necessarily going to lose a lot of time because of it.

Just make sure you are good at tracking your hours, and don't bill the customer for wasted time and I would say you will have a good source of income.

Answer 3

By the hour makes more sense to me since you could end up charging very little for what you thought was a small site and then spend days working on it and end up with no food in the fridge. It should also be able to extend project time with per hour sites rather than fixed price sites.

Answer 4

A fixed price contract is dangerous unless you can completely nail down the requirements - which is almost impossible. It is safer to charge by the hour, but a harder sell. There may be some middle ground where you charge a fixed price up to a level of work and then bill at an hourly rate above that. This could be constructed at the time you sign the contract based on the requirement definition.

You need to be fair, but you also need to protect yourself against the black hole of a spiralling project will creeping features.

Answer 5

Start by looking at the clients you choose to service. This will give you a clue to how to approach pricing. Think gourmet restaurant vs. fast food.

If you are going to offer a specialized service, or cater for highly customized client requirements, I would suggest an hourly rate.

If you are going to assemble websites using common templates and features, I would suggest constructing a "menu" of options at a fixed price for each "meal"

At the same time think of yourself - what kind of websites do you want to build?

Your greatest success will come when you want to build what your customers want.

Answer 6

It depends:

do you offer some kind of standardized product (cms setup, like typo3)?

then you can charge a fixed price for the installation, for the main setup, plugin installation, hosting and documentation.

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do you offer custom development, layouting and even writing?

Then you charge per hour

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Often its common to see mixed calculations.

Answer 7

I have this piece of string, how much do you think I should put it on eBay for?

What you charge will depend on what you offer? Are you going to be delivering a static site or with dynamic elements? Cookie cutter templates or a bespoke service? A database or some other user configurable backend? LAMP or MSFT? Hosting or hosted?

Will you be maintaining the site or just handing it over, firing and forgetting?

There are just too many variables to give a reasonable answer! Do you want to deliver a genuine service where you'll sit down and deliver to the customer's specification, or are they going to get what you want to give them?

Build your first one, with your first real customer. Charge realistically for what you're doing - make sure you're not out of pocket for anything. Make sure they understand your situation.

And, this is serious, make sure that your primary job doesn't have a problem with your doing this on the side - many terms of employment that I've signed over the years would have done.

Answer 8

Pricing by the hour and benchmarking against your competition seems to make sense, but it's a losing proposition long term. You can only work so many hours and you've capped your salary at this point. And hourly rates are ALWAYS negotiable (they can only go down for you).

Also, you make more money the slower you work, or if you don't know what you are doing. Your clients will figure this out in time and feel cheated.

And finally, the hourly pricing model doesn't work when you do a project for Client Y that is very similar to one you did for Client X. If it takes you 1/10 the time to complete it, you'd be foolish to charge 1/10 the price.

I feel the best way to charge is to determine the real value of the work, which does require you to do some due diligence in estimating what the project is worth to the client. This may result in different prices for equivalent work for two different clients, because one may see more value in the end result. I've been using this method for a while, and I will admit that a couple of projects took longer than I thought they would, or the client came back with change after change after change. So I've learned to estimate better, and I have a clause in my contracts about the number of revisions I allow for the agreed-to price.

When I estimate a job, I tally my probable hours, multiply by my own hourly rate, and determine what I have to make for this to be a profitable project. But then I go at it from the client's value side and factor in whether I'm competing for the business and other negotiating variables.

That said, I do charge an hourly rate for maintenance or content changes over time, and then another rate for emergency or overnight work that will impact my ability to get my other work done.

Answer 9

FlamingLogos has the right idea, though I'm not surprised to see everyone else sticking to the old hourly/fixed fee dichotomy.

You are likely to make more money in the long term if you can develop a value-oriented pricing approach. Hardly anyone does this, so it helps set you apart. Clients tend to like the idea in principle, because it reduces their risk and gives them confidence that they will end up with more value from the project than they're paying you. It does, however, require you to come up with a reasonable formula for estimating the value they get.

This formula in some cases can actually be built into the contract and will govern the amount of money you get paid. In other cases, you use it internally to set your price and then agree with the client a fixed fee for the job.

There is lots of economic theory behind why this is better (read my blog at http://www.knowingandmaking.com/ or Ron Baker at http://www.verasage.com/ for some of it) but the basic facts are: - you will make more money this way - but you have to be in it for the long haul, because it takes some time to get it right and you are accepting more risk in your business model

An example: I went into a partnership with a car insurance company in 1995 to build their first website. I agreed a small up-front fee and provided hosting, support and marketing services for a percentage fee based on number of policies sold. The company had no idea how much money they would make from the Web (and neither did I, to be honest - though my estimate was probably higher than theirs).

2-3 years later, with the sales level about 100 times the starting level, we agreed a buyout of the deal so they moved onto a fixed monthly price. We kept that going for another couple of years before they took it in-house. In the end, I did about five times better out of it than I would have done under an hourly or fixed price contract.