If you are in the business of web design, one of the first questions you need to ask yourself before taking on customers is, “How much should I charge to build a website?” Pricing is far from easy, especially for freelancers.
When I first launched my web design business, I have to admit, I didn’t take this question as seriously as I probably should have. My approach was little more than slapping a reasonable-looking price on project proposals and crossing my fingers.
It didn’t take long for me to realize that although OSC Web Design was steadily growing, my business wasn’t going to reach it’s full potential unless I zeroed in on the right amount to charge.
“How much should I charge to build a website?”
When you sit down to establish your pricing model, there are a few basics to keep in mind that can help make the process a little easier:
- Don’t charge too little. Don’t charge too much.
- Outline your expenses.
- Look at the competition.
- Build your value.
- Determine which pricing model is right for you: hourly or project.
Let’s go into more detail.
Don’t charge too little ... or too much
Perhaps you have a handful of loyal clients who are content with your current pricing. If it ain’t broke, why fix it — right? That’s what I used to think, anyway. But by unknowingly charging too little or too much, you could be missing out big time.
Charging too little?
My web design firm started out as a one-man band. I figured that since I was going at it alone, projects really didn’t cost me anything and every bit of profit was a bonus
What I neglected to factor in was the value of my time.
A chat with a friend, also a web designer, gave me a rude awakening. He was charging triple what I was and considered his services a bargain. As I calculated all the profit I might have made in my years of working for dirt-cheap, I vowed I’d never undervalue my time again.
Charging too much?
Nobody wins with sticker shock. The tough part is that potential clients usually won’t reveal the magical price range they had in mind. All you’re left with is a vague response like, “We’re weighing our options and will get back to you,” and no clue where things went wrong.
So, how much should you charge for a website?
By doing a bit of research and identifying your pricing sweet spot prior to sending a quote, you can avoid getting that loathsome slip. Below are a few tips for figuring out how much you should charge to build a website.
Step 1: Outline your expenses
Since you’re reading this article, I’m assuming you’re designing websites for a living, not a charity. To start, there’s no point in asking, “How much should I charge to build a website?” if you’re clueless on your expenses:
Subscriptions, licenses, payroll, rent, equipment ... All those horrid things that haunt your dreams.
Take a moment to list out your expenses and determine your cost of doing business. After you’ve put a number on what it takes to keep you afloat, the rest can be put toward that Corvette you’re saving for (or better yet, invested back into your business).
Step 2: Look at the competition
Check out your competitors’ websites, ask around or offer a price-match guarantee. While you don’t always have to beat their prices, you should be within a reasonable range.
There will always be a freelancer out there charging next to nothing just to get his/her name out there (ugh!). Don’t stress on it too much, everyone knows you get what you pay for.
Step 3: Build your value
If you want to charge more than your competition, you need to clearly show why. Do this with clear and persuasive copy. Do this with a proven track record backed up by your portfolio.
Do this by not slashing prices like a used car dealership.
I’m not against sales, but when you start dropping prices over a project proposal, you devalue your web design services. Even if the client gets a killer deal, they’re still going to question if someone else scored a better one and how much they can really trust you.
Step 4: Determine which pricing model is right for you
Anyone wondering, “How much should I charge for web design?” has arrived at the same fork in the road. You can charge by the hour, by the project or go with a mix of both.
The best pricing model for your web design business depends on your comfort level and the project.
Typically, new web designers will charge by the hour until they feel confident in estimating project scope. I’d recommend a combo — project pricing for web designs and hourly pricing for maintenance and ongoing work.
The pros of hourly pricing include:
- It’s usually safer for you — you’ll never get stuck working for nothing.
- Some clients prefer hourly, it provides a comparable and easy-to-understand baseline.
- It makes for easier pricing for ongoing work and website maintenance in the future.
The cons of hourly pricing include:
- How can you go wrong with good-old hourly pricing? Well, a number of ways may pop into your clients’ heads, like you taking forever to complete a project.
- Most of the time clients will predict tasks will take you far less time than reality.
- If you’re speedy at your job, it makes sense that you’d have a higher rate. The sight of $100 or $200 an hour, though, could send clients running in the other direction.
The pros of project pricing include:
- As you become more efficient, you can turn a greater profit.
- If your client is working around a budget, this assures them you won’t go beyond it.
- Repeat clients won’t be alarmed by an hourly price hike if you raise prices in the future.
The cons of project pricing include:
- Some clients feel more comfortable with hourly pricing and understand what they’re paying for.
- A flat fee may feel overwhelming to clients.
- You can underestimate the project … That hurts.
Bonus tips for pricing your web design services:
If you’re anything like me, you prefer nice, even, round numbers over odd ones. But you might want to make an exception for your web design pricing.
“Charm prices,” like $99 instead of $100, have been proven to make a positive difference in sales. In the book Priceless, William Poundstone examined eight different studies on the use of charm prices. He found they increased sales by 24 percent versus their close, rounded price points.
Don’t just offer them one option, present them with a bronze, silver and gold package. Options are always a plus as long as you don’t go overboard. You want to empower your client without confusing them.
Failing to collect data on projects is a big mistake. Trust me, I get it, when you’re wrapping up a project you really don’t want to put in any more time. Even so, taking an extra moment to record how long you spent on each task may prove to be invaluable for making decisions in the long run.
Build ongoing services into your packages.
Monthly services are beneficial for both you and your clients. Recurring revenue provides you with income you can count on and monthly website maintenance keeps your clients’ websites up-to-date and secure.
Take it from me: When you’ve successfully determined, “How much should I charge to build a website?” you’ll know it. It’ll be written all over your clients’ testimonials and your business’s success.