The Old Joel on Software Forum: Part 3 (of 5)

web development rates

Just doing a little survey here... what would you charge a small business for doing say a week of web site work? I am not familiar with this area. How are rates typically structured?

Suppose it was a business like a local restaurant or a jewelry shop...

Roose
Friday, November 21, 2003

You can quote an hourly rate or a per-job rate. If the work is poorly defined, go with hourly.

Matt
Friday, November 21, 2003

Well, that depends on how your are doing your graphics art. Traditional information architecture and graphics are are two fields, and you need to be aware of the separation when you are doing your pricing.

I've worked contracts involving both these and the rates I found valuable enough to be profitable tend to price the smaller markets out immediately. I recommend starting at a base of $25/hr for graphics design (provided you have an artist with either a degree or significant experience in the field), $30/hr for content and site design. These are good starting prices, provided you want to develop professional looking sites.

If you have little experience or lots of time on your hands, you may want to consider lowering your rates. Don't make the dreadful mistake of undercharging, as it will leave both you and your clients far more unhappy than having no site at all.

I typically used the litmus test of telling a client that the site will cost them over $1000. The clients that don't immediately flee for the door are worth keeping around.

My suggestion, work out the exact nature of the site, break it down into elements and time spent, and bill per hour. Be realistic and charge realistic prices. Clients that cannot afford to pay you what you need to make to survive profitably are not worth having.

Dustin Alexander
Friday, November 21, 2003

Small business owners are used to haggling and you have to be careful.

Dropping the price for a crate of fish from $55 to $52 and guaranteeing delivery by 7 am is no big deal, but that's no way to do web work.

I guess it gets back to fish being well defined, but "web site" not being so.

Friday, November 21, 2003

Dustin wrote
<I typically used the litmus test of telling a client that the site will cost them over $1000. The clients that don't immediately flee for the door are worth keeping around. >

That's dead right, poor clients cost development companies money, if you are serious about suceeding you have to be brave enough to turn down business.

Marx
Saturday, November 22, 2003

Thanks for the info... I'm just starting out, just thinking about doing it for fun, as a hobby. I'm a C programmer, so I know computers, but I just learned what the difference between PHP and ASP and all that was the other day.

So do you guys get together with the client and map out the site? It seems like that would help determine the rate if it was per-job. I would feel weird charging per-hour since I don't have any experience : ). It'll take me awhile to figure out everything for the first time.

Roose
Monday, November 24, 2003

Storyboarding is a great idea for mapping out a site. Flowcharting can work as well.

Try to keep in mind that user interface design for web sites is a completely different game than application work. I'd pick up some good books on the subject, which I'm sure this board can recommend. For myself, I would recommend Tufte's work on visual explanations and conveying ideas visually as a general text.

As for charging by the hour, I'm sure we all know how you feel, having been there at that point in our life. But if you don't charge by the hour, from the way you are stating it, you will be undercharging. Remember, the number one mistake you can make starting a company is not charging what you need to make. It all comes down to that. Resentment and failure lie down that road. If anything, I recommend charging a lower hourly fee. Remember, you are new to this business. You probably are not that great at specifying the workload of a given job. With that in mind, an hourly rate is the only way to go where you know you won't be putting in days or weeks of 'free' extra work.

Dustin Alexander
Monday, November 24, 2003

Just as a side note, I am of the opinion that attempting to start a business of this nature that pays as well as you might wish it to is an impossibility without attacking more cash positive clientele than those you mentioned above. The time does not yet seem to be nigh where we can expect to be paid as well as consultants by doing web design for small businesses. The amount they are willing to pay for this type of thing will disappoint you.

Dustin Alexander
Monday, November 24, 2003

>>The amount they are willing to pay for this type of thing will disappoint you.

This is especially true when you consider the amount of 'consultants' willing to accept very little to put up websites.

As someone (I think on JOS) pointed out, 'Web Development" is now at about the point that "Desktop Publishing" was in the mid 1980's - back then anyone with a desktop-published program was a Desktop Publisher, now anyone with a copy of Front-Page is a Website Developer.

They may not have good (or any) design skills, but they work for cheap...

RocketJeff
Monday, November 24, 2003

Exactly. Best to price yourself into a more midrange market. If you are looking for small businesses with cash to throw around, try upscale professionals. Lawyers, accountants, art gallery owners, furniture stores, small manufacturing and construction companies, etc. Mom and pop stores don't usually have the money to throw around, but most of the businesses I listed are in the 1-2M range when everything involved is taken into account. This is a good target market for a starting web design firm. They will pay $1k-5k for a site, which is good starting out, and they don't typically demand high levels of technology.

The downside of pricing into that section of business is that you are targeting people who tend to be very knowledgable about their fields and very quality aware. They know what they can afford. Instead of trying to barter you down in price, like mom and pop locations, they will instead require a very stringent level of service for their dollar. They actually care about quality over cash, and this can be nice but scary for a new development outfit.

Dustin Alexander
Monday, November 24, 2003