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When starting out as a freelance web developer, one of the most important questions asked is ‘How much do I charge for my services?’ and with so many factors to consider it can be quite a challenge to decide what the correct rate should be.
The best approach is to firstly find out what other agencies and freelancers charge, which means carrying out a bit of a ‘mystery shopper’ exercise. Call various freelancers and agencies (or ask friends to help you if you feel the need to remain anonymous) and ask what their hourly rate is – and then maybe ask for a typical price for a specific project. For example – a 6-page basic website, or a 30 second animation sequence.
The key thing with any pricing structure is that you must be able to live on your income. So work backwards. Decide how much you need to make per month (after putting at least 30% of all income aside for tax) and then work out what your hourly rate for billable work must ideally be. Remember of course that not all your hours in a week will be chargeable, as you will need time for admin, marketing, attending meetings and so on.
Once you have all of this information you can then make sure that you pitch your pricing correctly, but remember to take into consideration the following…
A junior developer, or one that has just left university, is of course not going to be able to command the same rates as one that has been working for many years and has more experience and a wider technical skill set. It is really just a case of being sensible and knowing what you are worth. It’s also true that some clients will pay more than others. As soon as you start talking to a prospect, you’ll instantly get a feel for whether they are expecting a replication of bbc.com for five pounds, or have a marketing budget to throw around, so remember to be cautious should you set any prices on your website or in a brochure. Once the prices are set then you must abide by them, so as not to get a bad reputation.
The next thing to consider is that you might not want to charge the same rate for all your services. For example, most developers will charge more for Flash animation or complex eCommerce sites than they will for a ‘bog standard’ HTML website with no Flash or customer interaction. As a rough guide, anything between £35 and £45 per hour seems to be around the right figure for basic programming, with more complex services going up to around £55 per hour. If you also offer a design service first, then, of course, there will be a separate rate for this also, usually around £65 per hour (based on information provided by ITjobswatch.co.uk).
But these are of course all just rough ideas based on our own information. It’s definitely worth doing your own research – as rates may also vary depending on where you are in the country. For example, a freelance web developer in London will undoubtedly charge more than one in rural Wiltshire!
Some clients will come to you with a basic static site design and a firm structure map. All you then have to do is create it, assuming their design is realistic and will work on the web of course. However, you are also bound to get involved with projects where the client has no idea and really needs some advice. At this point there is an opportunity to make extra money by charging a fee for what is in effect ‘consultancy’ – offering advice on how to make the site look good, how to set up the navigation, how to structure all the sub pages and so on. So it is definitely worth charging for.
As more and more marketing people recommend the benefit of email marketing campaigns, you are bound to get asked to create HTML emails. Typically these tend to be charged at anywhere between £100 and £200 per email – depending on whether the design already exists or not, and how complex the programming is. It is up to you whether you get involved in these, and it’s really down to how much money you can make from them and how busy you are with larger website projects.
This is a complete minefield and you need to be very clear in your terms and conditions what your policy is going to be. Most freelancers will allow what they call ‘reasonable’ edits – but there comes a point where you have to start charging. For example where you programme a site to an agreed structure and design – then the client decides to completely change it, without realising the programming implications. In any quote, state how many hours you have allowed, and what your hourly rate will be for future work.
It is easy to agree a price verbally and then never get round to formalising that, but it’s essential that you do as you need to avoid misunderstandings later. Be clear about the price you are quoting and how many hours of work that actually allows for. Also make sure that your terms and conditions include details of whether you charge for meeting time, travelling time, expenses and so on. Just so there are no issues when you send in your invoice.
This is a key decision that you will need to make if a client wants you to manage, for example, the copywriting or the initial design of the site (if this is not a service you offer) as part of a project. Will you buy that, mark it up and sell it on – or will you ask the supplier to bill the client directly and just charge a project management fee? There are pros and cons to each, as with the first option you make more money but risk credit and cash-flow issues and with the second option you make less money, but it minimises your risk and your admin requirement. Either can work so you just need to decide which is best for you.
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Appointing an accountant can save you time and stress when starting up on your own. If you would like to speak to someone about any of the above information or any other queries you may have, arrange a callback and a member of the team will be in touch.