Setting Web Design Rates

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I expanded and updated this guide with specific advice for setting rates and gotchas to watch out for in this article on Setting Web Design Rates.

Every rookie wants to know how to price services, and there simply isn’t the easy answer they are hoping to hear. There isn’t any secret formula. But I can give you some pointers.

The way to figure a project cost, however, is to break it down, estimate how many hours each part of the project will take you, and multiply that by your hourly fee. Yes, you need to determine an hourly fee. (You thought I was going to tell you what to charge hourly, huh? Fat chance!)

I can give you some things to think about, though. Remember that freelance web design is not a regular job—you don’t have an employer paying taxes or benefits, and you have no guarantees of how much money you’re going to make or when you’ll actually get it. You pay your own expenses, and they add up quickly. You’ll very possibly need to enlist the help of other professionals at times. You pay for your site hosting, your software, your business materials and your marketing efforts. In this sense, you’re definitely on your own.

Start by looking at your target market, often local. See what other designers are charging and pay special attention to others whose skill level seems close to yours. Compare their portfolios to yours and see how you stack up. From that, you should be able to determine a base rate.

One of the hallmarks of a green designer is undercharging. Naturally, you won’t start out at full rates. To be fair to your customers, you’ll need to charge at a level consistent with your experience and knowledge. But most newbie web designers err on the side of seriously undercharging, either because they underestimate the actual amount of work involved in creating the sites or they simply don’t have the confidence to request professional level rates. (Dix Tip: If you act like a professional, people will respond to you as a professional.)

You may need to compromise in the beginning. You could end up taking assignments you are less-than-enchanted with, or undercharging a bit on a high profile project to get the exposure. But make sure this is a decision you are comfortable with as opposed to pressured into.

If you’re wondering about when to raise your rates, a good rule of thumb is to increase rates when you have too much work to do. Simple, huh? Also, if you never hear a potential client characterize your rates as too high, you probably aren’t charging enough. On the other hand, if most potential clients complain about your rates, you’re probably charging too much.

You may also decide to (nicely) disengage from ongoing projects that are not profitable. While you don’t want to leave anybody out in the cold, your other clients will suffer if you take on too many projects that consistently require more time than you’re being paid for.

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Posted on February 1, 2009 at 8:52 pm in: Web Advice

Tagged as: Web Design