“What Should I Charge?”
If you are an aspiring web designer or developer, I recommend that you look for opportunities to work on websites to build your portfolio. Perhaps you find a family friend that needs help with their website. Perhaps you hear about a possible internship. At any rate, you have found a possible client who needs your help, and then the question arises, “What should I charge for my services?”
Like a lot of things in life, what you should charge depends on a lot of factors. Here is a list of them:
- How far along are you on your Web Design or Development skills? Are you at the beginning or near the end of your program?
- Take an objective look at the websites you have made for your classes. Do they look like professional websites? Do you have the design skills to create a professional website?
- Do you want to give the client a great deal because of a personal relationship or personal connection? (I make websites at no cost for charities I support. It’s a great way to volunteer for a cause and make a meaningful difference.)
- Do you need experience working with a client for your personal resume and portfolio? Perhaps you want to charge a special rate in order to gain the experience.
- How fast are you at making websites? Think about if it is right to charge a client for your learning curve.
- How are your English verbal and written communication skills? Because making website involves communication with the client on the project as well as putting written words on pages, excellent communication skills are critical.
My History of Charging
When I began my career as a freelancer, I first made iOS and Android apps. I created two large apps as a volunteer. Both of these apps were for good causes but without funding to create an app. On the one hand, it was a good experience to make the apps and increase my own credibility as an app developer. But on the other hand, I wonder if I committed too much time to volunteering my services. After all, if there isn’t a budget for an app, how much of a priority is it for the organization I am volunteering for?
When I transitioned to making websites, I initially charged $300 for a website. At that stage I needed experience making websites. If I had been charging hourly, I would have made around $5 per hour. Even so, I was being paid to learn how to make websites. At that point I didn’t have a strong portfolio of websites, and this charging strategy helped me to build up my client list. After the initial website, I would charge clients $60 per hour.
As I gained experience, my speed at making websites increased dramatically. At the same time, I noticed a trend of clients expecting an unreasonable amount of work for the $300 flat rate, with challenges drawing boundaries about where the pricing should fall.
The difficulty with flat rates is that clients will always want more. Just like you are incentivized to complete the work with the least amount of effort, the client is incentivized to get as much work from you as possible for the flat rate. A website isn’t like a printed document, where you have a first draft, then a second draft, and then you send a final draft to print. Because a website is a flexible document that can be readily changed, clients will always want changes and improvements to the website.
Along the way I changed my pricing strategy to an hourly rate. When I have new clients, I make an estimate of the time it will take to create the website, and I make every effort to complete the first draft of the website in that time frame, and perhaps not charge for all of my time if I underestimated. I also estimate on the low side, to keep the bid lower and increase the chance that the client will hire me.
Remember that the key for a freelancer is to build a client list, so perhaps you will make less money on your initial work for the client, but then then when the client returns to you for more work, then you have recurring income.
Pricing Options for Aspiring Developers
Charge a Flat Rate:
With this option, you determine a fair rate for the service. The price you charge should be in line with what an experienced Web Designer or Developer would charge for the same output. If you are slow at making websites because you are still learning, the flat rate may not pay you a very high hourly rate. However, you are paying yourself with the opportunity to learn and gain experience working with a client. Keep in mind that most business comes from referrals from existing clients.
With flat rate pricing, it is important to have some written parameters about what is included and not included for the price. What you need to draw up is a simple Statement of Work. Here is a nice article on how to write a Statement of Work by Zapier.
If you charge a flat rate for your services, it is customary to ask for a down payment before you get started. Even so, if you have a high level of trust with your client, then it is less necessary to obtain a downpayment or a Statement of Work
Charging by the Hour:
Another option is to charge by the hour for your work. This can be a bit more challenging, because as a new developer you perhaps don’t have the speed of a more experienced developer. To get started, I would set your price as follows:
- Start with the highest hourly rate you have earned as an employee. Your hourly rate is a reflection of your experience and communication skills as valued by the employment market.
- Add 50% to that hourly rate. The reason why you need to charge more as a freelancer is because you don’t receive any work benefits. You also are not paid for your selling work.
- If your calculated hourly rate is less than $25, then charge $25 per hour, if you live in or near the Twin Cities.
Over the next few years, as you gain experience and speed, you will want to move your salary to at least $60 per hour. After 5 years experience, your hourly rate should be around $90 per hour in the Twin Cities market as a freelance web developer.
Knowing that you will need to need to increase your rates as you gain experience, set the expectations for your clients that your price will be increasing with time and experience. One way to do this is to call your initial rate a “Friends and Family” rate when you get started. That alerts your customers to the fact that they are getting a price cut for your services because of your relationship, while allowing you to keep a higher price on the table.
Estimates for New Projects with Hourly Rates
When you have a new client with a project, the client will not want to prefer pay you an hourly rate. The workaround is to give the client an estimate of the costs to make the website in hours. For example, say you are making a bid for a simple business website. Say your rate is $25 per hour. Your estimate may look like this:
- Install WordPress and Initial Set up (2 hours)
- Design header and footer for the website with your logo and social media (1 hour)
- Design home page (3 hours)
- Four additional website pages: About, Contact, Photo Gallery (1 hour per page)
Total Price: 9 hours x $25 per hour = $225
When I estimate hours, I generally estimate on the low side, and then I make every effort to honor my estimates, within reason. After all, my goal is to start a relationship with an ongoing client. If your client has a good experience with you, they will be back for more services that you will continue to invoice for.
I generally don’t ask for a downpayment, but that is because most of my clients are a “friend of a friend”. However, I also avoid doing more than a few hundred dollars worth of work until I have received some sort of payment. I hold my charges and invoice at the end of each month.
“So, What Should I Charge?”
In the end, the price is what a customer is willing to pay. If you are able to find gigs at your rate, then perhaps you should think about raising your rates. If you haven’t been able to find gigs, then here are some ways to find Web Development and Design gigs:
- Is your rate too high for your level of experience?
- Take a hard look at your Freelancing or Agency website. Are there any typos? Is the appearance professional?
- Add to your portfolio by making some topical websites. You can place ads on those website to monetize them.
- Consider your verbal and written communication skills. For most developers, have a strong command of the English language is critical.
- Create social media pages to show the world your portfolio of work. Ask for referrals from your friends and family.