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  1. #1
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    a question for when you first started out doing the biz..

    Back then,
    did you guys make a pricing reference guide that listed the prices of various web elements (such as links, pictures,) that you would put on a website, or listed how much you would charge hourly for any task within a website project? It was not something that you'd share to the client, (of course ) but you would use it help flesh out an accurate cost of services. I am doing one right now, because I don't want to make any wild guesses when I'm estimating the cost of a web project. What if I present something to the client that said "this will cost an X amount of hours to complete" and not have anything sufficient enough to back up my statement? Badddd professionalism. I expect a client (who isn't someone I know) to challenge any price that I offer to them, and I have to be ready.

    Have a great weekend!

  2. #2
    _ silver trophy ses5909's Avatar
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    My inclination is that no matter how much you charge for your frist few clients, it won't be enough. I know when I first started, I tried to do something similar and I would charge them $XXX based on my development time and type of development required, and in the end, I found I didn't charge them nearly enough.

    You can break the cost down to each website element, but you also have to think of yourself as a regular business and charge for your operating costs. I know when I have a web development contract I will stipulate that X number of consultation hours are included. Make sure you charge for anything more. You need to charge for your materials, acounting costs, etc. Think of yourself as a corporation.

    Some people say, figure out your cost estimate, then double it. You need to make that decision. It is a decent rule though. When you are first getting started and even sometimes afterwards it is hard to estimate the time it will take to complete a project, so how can you really estimate the cost? Make sure you pad the time to include this.
    Sara

  3. #3
    Non-Member Egor's Avatar
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    Back then, no. Right now I try to base my quotes on my hourly rate - which is the outcome of a business plan. I never bill by the hour (unless it's updates), but rather base the quote on the approximate time it will take me to do.

    If you're concerned about clients not being happy with your quote, then they're not worth working with. You don't walk into a supermarket and say, "I want to pay $2.00 for a packet of smokes (when it's priced at $8.00)." The supermarket has a business to run, where they can't afford to match the customers' budgets.

    You know how they say, "A customer is always right." Not in my books. I say a customer is always right at the right price.

  4. #4
    ☆★☆★ silver trophy vgarcia's Avatar
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    Quote Originally Posted by ses5909
    My inclination is that no matter how much you charge for your frist few clients, it won't be enough. I know when I first started, I tried to do something similar and I would charge them $XXX based on my development time and type of development required, and in the end, I found I didn't charge them nearly enough.
    Oh yeah, I did the same thing. Here's a tip for everyone: no matter how much you're charging, it's probably not enough for you and it's probably too much for the person paying the bill. Your best bet is to find a happy medium that keeps your bills paid and keeps your clients satisfied with the price they paid for your work. This medium will be different for everyone.

  5. #5
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    It took me a long time to know what to charge. Back then I would take a guess on how long it would take me and charge that. However often things would take longer than expected so now days I charge based on how long I believe the whole project will take, plus a few hours (because it know it'll take a few hours longer).

    I recommend that you do a few jobs at a price you think the client will be happy with and your ok with and even though you arent becoming rich of these first few, its the first few that if you can keep happy, they will set you up with plenty of referrals that'll get your business going.

  6. #6
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    We certainly charged far too little in the early days. Now I look back and see all the money we left at the table.

    These days we are trying the value pricing model and its working much better for us than trying to work out how long a project will take and applying an hourly rate. Instead we help the client see what the benefits of the project will be (eg increased revenue of X% or improved cash flow management or not having to hire extra staff as a result of increased efficency of current staff) per year in estimated cash terms and price accordingly.

  7. #7
    SitePoint Wizard silver trophy someonewhois's Avatar
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    Quote Originally Posted by mstwntd
    You know how they say, "A customer is always right." Not in my books. I say a customer is always right at the right price.
    Isn't that kind of... not what you were saying?

  8. #8
    Webwellwisher Robert Warren's Avatar
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    Quote Originally Posted by samsoner
    Back then,
    did you guys make a pricing reference guide that listed the prices of various web elements (such as links, pictures,) that you would put on a website, or listed how much you would charge hourly for any task within a website project? It was not something that you'd share to the client, (of course ) but you would use it help flesh out an accurate cost of services. I am doing one right now, because I don't want to make any wild guesses when I'm estimating the cost of a web project.
    I did a bit of checking around, picked a flat hourly rate that didn't make me look too much like a rank amateur, and quoted flat fees as much as possible; if I underestimated the time required (which I did often in my early days), I'd just bite the bullet and stick to the original estimate (which I still do). If I overestimated the time (rarely), I'd still bill the agreed amount if there was a contract involved. It wasn't long before I could accurately estimate time required on a project.

    I disagree, though, about not sharing that kind of thing with the client. Why not? You don't have to spell every little thing out, and of course you want to make clear that these are all estimates, but providing a detailed cost estimate guide can do a lot to secure your credibility with a skeptical prospect. My own rate sheet (downloadable PDF) is a two pager; the first page is a list of my rates, and the second is a guide to working out total cost estimates on projects. All part of the service.

    What if I present something to the client that said "this will cost an X amount of hours to complete" and not have anything sufficient enough to back up my statement? Badddd professionalism. I expect a client (who isn't someone I know) to challenge any price that I offer to them, and I have to be ready.
    Don't be so defensive. If you expect a client to attack you on price, they'll smell blood on you and do exactly that, which of course will just support your original belief. It's a self-fulfilling prophecy. Honestly, I've rarely ever gotten into this kind of debate with a prospect or client - if they arrived with expectations wildly different from the reality, they usually just have a heart attack and I never hear from them again.

    Don't quote hours, quote dollars. Don't negotiate your fees; if they say it's too high, and ask for a breakdown, simply tell them that you've done this kind of thing before and that you know what's going to be involved and that your fees are reasonable. If they still complain, offer a scaled-back level of services for a lower fee. But do not get into a nickel-and-dime match with a client or prospect over the estimate. If they decide to go with someone else, take it in stride and move on - you're better off. The more defensive you are about money, the more money is going to be an issue to be defensive about.

    At the same time, make sure that every aspect of your relation to your prospect/client is characterized by high professionalism and high service. The more value you deliver, the less price will ever be an issue.

  9. #9
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    Robert is right on the money. I recently had a problem with a client who decided to tell US how long a certain task would take us to perform per month. If he knew what was involved he should be doing it himself. But he doesn't which is why he is paying us to do it. We offered to do a simplified version of the task he wants done otherwise out quote stands or he can go elsewhere.

  10. #10
    SitePoint Wizard johntabita's Avatar
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    There's a fundamental question that needs asking: Do you want to get paid for the value you provide, or the time you spend providing it?

    Everything you're doing is well and good. It's important to know what your internal costs are, and the only way to determine that is knowing how long things take you. But if you want that information in order to defend your price, then you are missing an important principle of the market: that price is not a function of your cost or time involved; it's a function of value to the purchaser. If you can establish value (i.e., what the client gets for his money), then you have a better chance of not getting challenged on price.

    When thinking about value, keep this in mind: prospects are not buying your product or service, they're buying the consequences of that product or service. That usually comes in the form of an increase or decrease, such as WMD already mentioned: increased revenue, improved cash flow management, increased efficiency, etc. If a website will increase or decrease something that the prospect wants increased or decreased, then it has the potential to create value.

    If prospects are constantly challenging you on price, then you don't have a pricing problem; you have a value problem. Here's a great article that I wish I'd wrote:

    Until Value is Established Any Price is Too High

    And a quote from it:
    It seems that everywhere I travel salespeople are tormented by the same objection. They ask me, "What do I do when the customer says my price is too high?" My response is always the same, "When the customer tells you that your price is too high, the customer is right."
    Here is an article that I did write.

    Hope that helps.


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