Last month we released our website quote generator – it’s been quite a success. Hundreds of people have used it to generate thousands of quotes.
Using the quote generator, however, assumed that you knew how much you charge per hour – the price roughly based on your experience. This might not always be as straightforward as it seems.
If you’re in a hurry, here’s a link to our hourly rate generator. It is probably worth reading on, though.
Why you need to figure your correct hourly rate
There is much more to issuing a quote and figuring out how much you should charge for web design than simply working out your hourly rate, especially if you’ll be using a mechanical way to generate it. A successful web design project starts with a thorough freelance proposal, covering not just the value you’ll bring, but also a satisfactory quote for both you and your client.
You’re now asking – so why, in the name of heaven, did we create an hourly rate generator? And where does that fit in when it comes to figuring out “How much do I charge for web design?”.
Because, even though your hourly rate will not guarantee the most money you can make from freelancing, it is a great way to ensure that you don’t go below the minimum amount of money you need to survive.
This might seem trivial, but it can make or break a successful stint at freelancing, whether as a web designer, or any other freelance work. Heck, even an agency – if you don’t get your hourly rate right for the different resources in your agency, you’re going to have a hard time breaking even.
Most people starting off in freelancing will assume that they need to earn around as much as they were when employed in order to cope. As a freelance web designer – this is a very dangerous path to go down. When you’re employed there are many overheads that are being paid by your employer.
Try the generator out and you’ll quickly see that all the little things add up – you’ll need a new PC every few years, you need to pay your bills, you need new software licenses and subscriptions to things like Litmus, and hosting for your site(s). Add to that a few other subscription services and things start to rack up.
You also now need to pay your own health insurance and travel expenses, not to mention promoting yourself, and spending time looking for clients. And now, your internet and telephone are actually expenses on your business (at least, you should count them in this way).
Oh, and a freelancer that does not learn and attend events will never be ahead of the curve. That costs money too.
In fact, figuring out your own expenses over the whole year might be one of the more important (actually, crucial) things you do before or when you are starting out.
And with this in mind, we created a little nifty tool (if we may say so ourselves) to help you understand how much you should be charging your clients, at an absolute minimum or with some profit worked in.
It’s really important to understand your minimum to charge for a website and to never go below it for a variety of reasons. By going below your lowest possible rate you’re damaging your reputation and risk being doomed.
I feel that if you’re charging a minimum of $25/hour and a job for $10/hour comes in, don’t take it. It would be better to wait tables or find a few gigs for data inputting on fiverr.com. Just don’t take work in your area of specialization for less than what you intend to charge in the future because it becomes very hard to charge more going forward.
People will start expecting this rate. And you will only rate yourself at that rate, which is a dangerous state of mind.
We steadfastly refuse to take on work for less than our standard hourly rate at our agency. This does mean that we do get less work than some of our counterparts, but it also ensures that when we do get the work we’re paid well for it and my employees can afford to do a great job of it.
In the downtime that sometimes results, we work on our own marketing. This will eventually lead to us getting as much work as we can handle at above our minimum hourly rate, and we’re getting there slowly but surely.
Making more money than your base hourly rate
One of the benefits of being a freelancer (or an agency for that matter) is that you have the opportunity to make more money than you made while employed.
But how can you do this?
The simple way is to work in some profit into your hourly rate (you can do this using our tool too).
The slightly harder way is to do so by trying to understand how much your work is worth, rather than understanding how much you should charge for your time.
There are a lot of web designers and developers out there, but there are also quite a bit of clients to go round. You can make more money in two ways – you either work much more than others, or you work much better than others (and then charge your clients by project, therefore increasing your effective hourly rate).
The first way is a great route to burnout – there are only so many hours in a day/week. The second way, is the intelligent and correct way!
We have a few friends who freelance, so we get asked about how much people should charge on a regular basis. We always start with getting them to calculate their hourly rate – this gives us a baseline (from now on we can send them to BeeWits’ tool).
If their expectations end up with an hourly rate of $100 per hour, for example, but the value of their work is only about $50 per hour, then we usually recommend that they’d better remain in employment. This usually only happens when people are changing industries.
As a freelancer, you should be able to undercut companies offering a service similar to yours. You are a “small business” after all.
So let’s assume that we’ve arrived at a rate that’s $25/hour for the work that you’re doing. Now a client comes along and you estimate that it’s going to take you 10 hours to complete. $250 should be the absolute minimum you charge for a website (this applies for web designers, or other self-employed workers, whatever your specific line of work). We know by now that if they offer us $200, then we’d be better off spending 10 hours improving our Behance profile or doing any other design work.
The simplest way to get more money is to ask the client for a budget. Most clients are not technical. This puts them at two ends of a spectrum – they’ll either undervalue your work grossly or else overestimate how much time it will take.
If your client undervalues the importance of your work and the website cost when you ask for a budget you’re going to have to explain three things:
- how much work is really involved in the process to create a website,
- how important your expertise is to getting the job done well, and
- how much the client can get back if they spent the right amount of money on the job.
On the other hand, larger clients and some business owners in lucrative markets tend to “overestimate” how much a job is worth when they’ve been used to working with much larger agencies.
This is where you both have scope for benefit.
If you ask the client for a budget and they tell you they’re prepared to pay $1,000 for the job (that we had thought would be worth $250) then you can send in an estimate for $750. You’ll get the job, the client will be happy that they’ve struck a deal which is less than their price range, and you’ll be making three times what you had originally intended on making.
This is also important for the volume of work you get. Chances are that when a client has a budget of $1,000 – if a supplier comes along with an offer of $250, then they’ll assume that you either haven’t done your homework well enough or you’re not the right person for the job.
There is another tactic for freelancers who are willing to take a risk. And this is to go back to the client and tell them that you can’t do it for $1,000, because your minimum for similar jobs is $1,250. This takes balls, and it can go both ways. Some clients will respect you for “sticking to your guns”, whereas others will move on because all they look for is cost, not value.
Keep one thing in mind: if you do get this job at $1,250 – then you need to make bloody sure that you do your damndest to give the client the best possible service and result. Even if it means taking 20 or 30 hours, don’t let the client come back to you with a single change that was your fault.
So identify your hourly rate and get cracking on quoting your clients – but always keep in mind that your work might have more value to your clients than the sum of your hours multiplied by your hourly rate.
Charge for monthly maintenance
Once you’ve won a client and closed a project, how do you keep profiting from this client, especially if they’re thrilled with your work?
The problem with web design work, is that it doesn’t lend itself too well to monthly retainers.
But here’s where you can get a little creative and find ways of providing additional value to your client, rather than just a flat fee for “creating a website”.
We suggest that you put in a monthly recurring maintenance agreement for the website you have just created. Our opinion would be to estimate this at a couple of hours of your time, which would then involve stuff like:
- Uptime – make sure the website of the clients stays online
- Domain + hosting administration – renewing domains, keeping hosting paid and accounts “clean”
- Updates + security – ensure the site has the latest updates in place to keep it protected from any security vulnerabilities. Speaking of website security, we have reviewed iThemes security, which is a fantastic plugin which we make sure we install on every site which we build
- Content management – for less technical users who don’t want to do anything, you could perform content updates when necessary (even charge extra for this)
- Performance – ensure the site is working in tip-top condition, loading fast and is free of bugs or problems
- Support – fixing of any problems which crop up along the way
If you don’t do this as soon as the site is launched and released the client, you’re going to have to deal with these issues on an ad-hoc basis when they crop up. At that point, you’ll have to start renegotiating and figuring out the way to work, what you’re going to include, whether this is a one-off job or ongoing.
So doing a bit of homework beforehand and pushing the client to go for this retainer before you actually sign-off the project, will give both you and the client peace of mind.
For you, if you do this for each of your client, the monthly retainers will add up to a nice amount which could keep you afloat when times are tight. You could also schedule the time for doing the actual work to a specific day, (let’s say a specific day of the month) and do all of the client work together, making it much more efficient for you.
For the client, they have the reassurance that their site will always be “safe” and up.
If you want to get even more creative, you can pitch a few more additional services (depending on your expertise), such as social media marketing, SEO, copywriting, email marketing and plenty of other services around the digital marketing industry.
How much do you charge for web design?
To conclude, there is no generic answer to how much you should charge for web design. You need to adapt to the needs of the client, the project and most importantly your own terms. Remember, it’s only the first few clients which are going to be the most difficult. Once you’ve done a great job with your first few clients, things will start getting (somewhat easier).
Now that we’ve let you know about our own process for how much to charge for web design, or other projects for that matter, why don’t you let us know how you go about figuring out how much to charge?