Pricing if you are 18 years old

Well, yet another 18 year-old has asked how to price a website at $4500 like other firms when he fears that as an 18-year old he can only get away with $1000. See previous blog entry for his full question.

We’ve had this discussion before, a couple of times in fact, so search through previous blogs and articles on Sitepoint to learn more.

But here’s some thoughts in a nutshell:

1. People buy based on value. It is up to you to be someone who communicates your value in everything you do.

2. What creates a sense of value? All or some combo of the following:

- Focusing on a specific target market, so that the people in that target market see that you know their needs and speak their language better than anyone else.

- Creating a compelling marketing message that includes: the problem you solve, the benefits of your solution, why you are unique, proof that you are unique (e.g. testimonials, case studies).

- Using educational marketing approaches instead of sales pitches. In other words, provide valuable, free information that addresses your prosects’ top issues (e.g. how to make more money).

- Getting visible in ways that establish you as the “go to” person in your target market. This includes speaking, writing, publicity.

- Presenting yourself as a powerful, competent professional who wants the work but doesn’t need it. Dress great. Videotape yourself in action and get better. Make eye contact. As Brendon Sinclair notes, use an expensive pen (and leather note pad).

- Ask great questions, the kind of questions that show the prospect you know your stuff and understand their issues, and the kind of questions that help the prospect see that they get 10X your fees in value by hiring you.

- When people raise objections to price, be ready with some responses, and be ready to say “no.” I’ve listed objections elsewhere on sitepoint and on my own website.

3. If you don’t believe your stuff is worth $4500 instead of $1000, you’ve already lost. Why is your work worth $4500? Are you sure? Once you are, and can communicate that effectively, you’ll see some improvement.

Here’s a personal note:

When I first started in consulting, I charged about $2500 for a strategic retreat with clients. Now I charge $13000 – $20000 and win 80% of the bids I submit. Partly this is because I’ve followed the advice above, and partly because my business now comes from referral sources who have seen me in action and know what I can do.

So it may be that as you get more confidence and experience, you will figure it out naturally, as I did.

Finally, read SPIN Selling (Rackham) and You Can’t Teach a Kid to Ride a Bicycle at a Seminar (Sandler) this weekend!

Ah, youth! I envy you.

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  • Thirteenva

    A key element here is that at 18 years old its sometimes tough to distinguish between what you know, and what you think you know. Let me clarify.

    I wasn’t doing graphic/web design at 18, I started at 20, and many of my sites were ‘better’ (functionally and visually) than my freelance competitors, many who had been in the game since the mid ’90s and who’s site designs reflected this… However, what I thought i knew about selling my services was drastically different than what I did know. While my product may have been better in some aspects, I lacked some knowledge, that one gains though experience, that did not allow me to effectively answer some of my clients tough questions.

    So what you need to address is, are you feeling that you can’t charge effectively because of your age, or because of your experience level? Your experience will show beyond your age, trust me. I walked into an interview for a contract job once about 3 years ago, and though i was the youngest person interviewed, I not only got the contract, I got a full time position offered to me on the spot. (PS – I took the job and have been happily working it for 3 years)

  • http://www.razorstudios.net netkid

    I am 17 and I made my first pitch a few months ago. Although it was for a non profit group, they were willing to pay about $600. The site was worth way more, but I guess I jumped at the opportunity and took it, and currently working on it.

  • http://www.lowter.com charmedlover

    I’m 15 and I’ve won all the bids I’ve entered, although they are few in numbers, lol. As long as you have some work to show most people just find it amazing that you can do that work at your age, and have something to do with your life.

    Do some work for free to build up a portfolio, and then try to bid for some projects. Some good websites to design first are always for nonprofit groups or very small businesses.

    I think another profitable method is to work with a design group, so you don’t have to handle the client, but the team or company you freelance for really know what you can do.

  • Anonymous

    This helps a lot. Thank you Mr. Neitlich and those who added comments.

  • http://www.oneclicksolution.com oneclicksolution

    Andrew’s comments have always been on par for the most part (Like 99.9%), but this subject can not be resolved by just plainly ‘knowing thyself’. It can however be accomplished by jointly considering the above comment by Thirteenva. I

  • pdxi

    Okay, I really want to chime in here…

    I’ll be 23 this fall, and I have been a professional web programmer for six years. I’ve also been programming since the age of 8 (14+ years!), and I have been using Linux since 13 (9+ years!).

    For a long time, I thought I knew everything. Granted, I did start with a significant advantage over other people my age (and perhaps over people many years older than myself), but the truth was that I still had a lot to learn. Being a ‘good’ programmer is one thing, but being a ‘great’ programmer is another. No, I don’t walk around calling myself a ‘great’ programmer; rather, I strive for greatness in everything I do, using the things that I’ve learned in the past few years.

    One of the big obstacles early on was proving my value to others. Sure, I knew a fair amount about software design methodologies and web technologies, but I had to do a lot of slogging to prove this over time.

    Here I am, five years into being a freelance consultant, and I am finally starting to get valuable clients. I also finally have the chance to produce some really great work.

    So, what’s the moral to all of this nonsense? Starting out now, you may not be able to charge the “blue ribbon” price for everything that you do. But, with plenty of hard work (and hard won experience), you will be able to charge better prices.

    There’s just something about the struggle that adds to one’s character. My clients believe that I know what I’m talking about, because I’ve learned it from being “on the ground floor” for a few years, and for this they are willing to pay an (almost) premium price.

    Best of luck to everyone just starting out at a young age. I was there once, and I’m sure many people here started there too. You’ve got a lot to learn, but every last bit of it provides invaluable experience.

  • http://www.ptpnewmedia.com ptpnewmedia

    I am turning 24 in August and have built my company from the ground up. When I first started, I taught myself everything from HTML to ASP to Flash etc. What I did not know I have learned from experience and from school. I am currently working on my MBA and have learned so much more of the business side of things from school.

    In addition, my company is now in its third year. When first starting I did not know what I was getting into. It was a situation of make money or go hungry. I did have some help from my parents though.

    Long story short. I was going to college, waiting tables, and playing in a punk rock band. I did not want to take out a loan for school and knew waiting tables and the band would not give me enough money. The day I quit my job waiting tables I went down to the court house and got my DBA. I had already been programming for a while.

    To get started, I sold all my band equipment (Amp, Cab, PA but kept my guitar and bass). Next thing I did was to go for small biz clients and averaged $2000 – $2500 projects while I learned more about the business. My first year I had sales of $10,000. Worked out of the bedroom.

    Time goes by and now in my second year. Still actively going after clients but getting a couple through word of mouth and referrals. Average projects begin to increase to $3,000 – $4,000. I also incorporate as an LLC to look more serious and professional. Did some trade of services with the lawyer. Also, a little luck came my way and landed a contract with the largest credit union in the area for $13,000. At the end of the second year sales increased to $25,000. Still working out of the bedroom.

    Now I am currently in year three and things have taken off. Could not stand the bedroom anymore and finally got an office. This was a great investment. I have become more productive and am able to separate the different aspects of my life. More clients coming in through referrals now that the client base is growing. Average projects are $6,000 – $8,000. Projected sales at the beginning of the year were $60,000. I am now shooting for $80,000 and pushing for $100,000.

    Some call me crazy. I work about 60 – 70 hours a week plus full time MBA class load. I am to the point where I am looking to hire but don’t want that commitment just yet. Instead I have been doing a lot of outsourcing. My job has become more sales, business development, and project manager oriented. I still design and program but not nearly as much. I have also streamlined the sales process.

    I have found a niche within the credit union industry thanks to the client a year and a half ago. With a niche I am becoming more of an expert and a valuable asset to credit unions.

    In addition, I am no longer a web designer or developer. I am now a

  • aneitlich

    ptpnewmedia:

    Thanks for kind words about AttractNewClients. That site should be the subject of its own blog, and will be soon. But here’s a quick update: We are about one month away from relaunching with a whole new interface and functionality — although stuff there now is solid for anyone joining between now and then.

    Also, that’s just one of many sites we are launching using same concept (in a variety of categories). It’s a very exciting venture, with tons of potential!

    So what we have is a terrific infrastructure for getting paid sites up fast and testing them. And that’s why AttractNewClients is getting overhauled — in order to have a single, flexible, agile infrastructure for delivering great, paid content. We wrongly went with Java Struts for this initially, which was WAY too inflexible for our changing requirements.

    More info to come, as this is a business case you’ll want to hear about. Lots of lessons learned, and we still have a long way to go to make the enterprise as valuable as we think it can be.

    This post is actually a terrific complement to the posts about being young and building companies, as everything in this venture comes from two decades of combined offline and online marketing experience that my business partner and I bring to the table — often with some tough lessons in between.

    I’ve probably said more than I should, but I’m quite excited about our progress.

  • Etnu

    Find a job with a local company who will pay you a reasonable salary, and run with it. Use that experience to build up towards making stuff on your own.

    Keep in mind, however, that freelance design is complicated. I work a full time position and get paid quite well for it, so I only do side projects when the deal is really sweet, or when I’ll be using the opportunity to learn something new.

    You know that you’re “good enough” to be demanding $4500 for your work when asking for $4500 doesn’t even make you think twice. The first project I ever did for someone resulted in about $500 compensation. Now, anything that would result in less than $100 an hour, I don’t do.

  • codeninja

    I also feel the need to chime in.

    I started developing web sites after a 2 week gig with NeoPets.com in 1998 when I was 18. After they lost some of their advertisers they sent me and a few other developers packing.

    I started trolling posts for jobs on classified systems and found my first client (which is still my current client) and priced his site at $2500. Being that it was my first project it was grossly underbid and its code was seriously procedural. (it works, it just isn’t pretty)

    My second project was a VERY large shopping cart system that was way over my head. But I won the bid because I was selling the system… the benefits… the value of a good design which I now knew how to do after flubbing the first site. By focusing on value you can sell a site for 5 times what you would normally charge because the client will be WILLING to pay whatever you ask to get that value.

    Find areas of his business that are costing him money, lost time, lost productivity, or lost sales. THEN propose a way to fix those problems in a way that the client will be able to extend in order to fix other problems.

    I NEVER bid a job by the hour… it actually encourages the developer (me) to take longer on the project than normal, guarantees that the client will pay more for the site than the estimate, and presents a great deal of uncertainty and questions for a new customer.

    Price projects based on a flat rate and a fixed time line… this is sometimes the hardest thing I do… because you have to be really good at understanding the problem, the fix, and how much work it will REALLY be. You have to spend a good deal of time creating project requirements and outlining them for a client. (BE CLEAR, but don’t write yourself into a method that doesn’t provide you flexibility) But if you can master the quote… this is what you get.

    You can tell the customer that “This is a firm price, it wont increase if the time line is exceeded for any reason unless new features are added. With other firms you run the risk of paying more than you want. With me you know what your going to get!”

    These are my hard earned tips. But with this experience I now price projects starting at $15K and up. Im almost always the highest bid, but my value is better than anyone else. My largest (most profitable) project to date was landed last month for $75K. And we do work for major names and huge sites.

    You’ll learn your own lessons. But these are mine.

  • malikyte

    Okay, all of these are GREAT lessons, and other than the site link that ptpnewmedia gave, I’ve heard it all before.

    What I haven’t heard about are the legal issues, what you have to go through to start your own business, how to get a business loan, and so on and so forth…what type of legal advisement should one get, and the like.

    I realize this varies from country to country, and within the state/province/township boundaries…but, I’ve never really ever read anything about this matter, only how to sell oneself (which is always slightly different through personal experiences).

  • Pests

    I’ve always been interested in this type of work but clueless on how to seriously break out into the market. Any tips?

    Thanks!

  • pdxi

    malikyte: Well, that doesn’t necessarily have anything to do with being 18. You can use the same resources that everyone else uses. There are many books on the subject, so I’d recommend spending a couple of hours (or a day) in the small business/entrepreneur section of your favorite book store.

    Pests: If you’re looking for tips on how to break into the web development market, then I suggest that you read every one of Andrew’s articles here as well as on his web sites.

    See, the thing that I love about Andrew’s columns is that he provides everything BUT simple answers and silver bullets. He provides boat loads of inspiration and challenges you to find the solution that works best for you. The concrete, tangible ideas are for you to develop, and no-one else :)

  • http://www.digitalcreative.net DCS

    You young guys 15 – 22 years old have no business building sites as freelancers for $4500 Why do I say this? Because you are too young!

    Pissed at me for saying that? Think I should shut up? That’s exactly the reason I say that. It’s not that I don’t think you can do the work or desvrve the compensation but you aren’t mature enough to handle the responsibility that goes with it and even more importantly you are depriving yourself. At that age you should be out drinking beer, chasing girls, going to concerts, etc., basically enjoying life not worrying about angry clients, meeting deadlines, not getting paid on time, getting burned out, etc. There is plent of time for that later, get a job, make some money, have some fun!

  • http://www.silentflute.co.uk worchyld

    I say the opposite – you learn way more running your own business than laying a girl, or flipping burgers / doing all-in-one IT code-monkey job for ultra small company who don’t care/understand that you don’t know everything about IT and want everything yesterday — but if you have no money, then I, would say – get a job and set a goal, earn that money – save damn hard and once you reach that goal put 20-30% of it into a business (or all of it) and go for it — business is very expensive, even if you run it from a “home office” with no insurance.

  • http://www.digitalcreative.net DCS

    worchyld I am not talking about learning, I am talking about getting out and enjoying life a little bit before you get bogged down by an all consuming career.

  • themidnightwill

    Re: DCS’s post

    Young guy’s should follow their dreams not the norms. Not everyone want sto go out and get drunk, sleep around, and flip burgers. If you had a son or daughter wanting to start their own company, would you tell them to sleep around instead?

  • dingaling

    Re: DCS’s post

    You say ‘get a job, make some money’ then ‘I am talking about getting out and enjoying life a little bit before you get bogged down by an all consuming career.’

    Its one or the other. These guys do want to work, just not in some low paid, unrespected slave labour camp.
    I think what you mean to say is ‘Hey kids. Stop taking business away from us older guys.’
    Hell, I’ve seen stuff done by people half my age thats better than some so called professionals do, but no, you should be out wasting your time and letting the ‘Grown ups’ do the – ‘worrying about angry clients, meeting deadlines, not getting paid on time, getting burned out, etc.’

    Well this is one grown up who wishes web design had been around when he was wasting his time at 18.

  • R.A.nightwish

    Hi, i quiet disagree with DCS, i think when you creat the buisnes, you learn more,
    your fit, young, ready to learn, but… as i see ‘themidnightwill’ is right, getting out and enjoying a small buisnes wilth you are young, i respect that, i am ready to learn, and i am still at scool in 4PG and having a bit of ‘stress’ time and so i ask to miself, “why the hell am i still siting my ars here when i could be having my own buisnes???, i have the cash, perfect fluent english-french as well, and i feel like starting to do something of my life!!!!, if you have some ideas, please contact me at th3k3t@hotmail.com