How Should a Freelance Web Designer Set Pricing?
Setting pricing is probably one of the most difficult tasks a freelance web developer must do before getting the first client. You don’t want to set your prices so high that they exclude clients and you don’t want to set them so low that you cannot turn a profit. So what are some typical ways a freelance web designer sets pricing? What follows are some important steps that must be accomplished.
Check the average salary for a web designer in your area. Different areas have variations in the cost of living and wage that it takes to live. There are many different sources of salary surveys for the web development profession. Make your decision at this point as to what you would like to earn.
After you’ve determined your earning goal, compute your overhead. Overhead is a term that refers to your business expenses. These will include expenditures like taxes, insurance, marketing costs, and office supplies—any cost you must incur in order to conduct business. The overhead amount will be for the entire year and added to your salary figure.
Calculate the number of non-productive hours you’ll have in a year. Non-productive hours are those where you spend time working on business tasks that are not related to actual projects. Examples of non-productive time include meetings, answering e-mails, making telephone calls—anything not related to an actual web development job.
Determine a profit margin (percentage) and multiply it by the overhead plus salary total. For example, you may decide that you want a 20% profit margin. Without a profit margin, your business cannot survive. Consider what a profit gives you. It gives you the ability to expand your web design business into new areas. Once you have the result from the multiplication, divide it by 2080 hours (a typical work year) less the non-productive hours and you have an hourly rate.
Study the market around you to determine what people want to pay for your services. You may go through all of the steps and come up with a price but find that people are not willing to pay that price. Then there is always the problem with your competition under-pricing against you. Also consider that not everyone has the ability to pay your price. Sometimes, you might realize greater profits if you lower your prices just enough to get an influx of work. Be careful though. Lowering your prices too much could spell disaster for your business in that you will have too much work and not enough time to complete it.
Decide if you will use fixed or hourly rates. Web designers are divided on this issue for the most part. Some freelancers like fixed rates because there will usually be no pressure from a client to finish a job faster. Oftentimes when a freelancer is charging by the hour, the client tends to check on their job more frequently in hopes of getting the job done faster thus saving money. The freelancer feels pressured in this scenario and sometimes takes shortcuts in order to get the job done more quickly and make a happy client. There is really no right or wrong way but keep in mind that when you are not on a clock you have more independence which is what freelancing is all about.
0
466
