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Charging for projects

This is a discussion on "Charging for projects" within the Client Talk section. This forum, and the thread "Charging for projects are both part of the Business & Marketing category.

Old Jul 16th, 2007, 12:41   #1 (permalink)
 
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Charging for projects

This section has been pretty quiet since we campaigned for it to be added!

Thought I'd start a discussion for everyones benefit, especially those of us just starting out.

How do you work out what to charge clients?

What is a reasonable per hour rate?

Do you charge flat fees or charge per hour?

Any discussion that would help any of us starting out to do with working out a reasonable charge to a client would be fantastic.

Personally I'm currently charging £20/hour. I have about 3 years learning experience and about a years worth of experience actually designing for money.

I'm trying to build my portfolio and offer lower rates and even free rates for non-profit organisations.

Discuss....

Mike
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Old Jul 16th, 2007, 15:41   #2 (permalink)
 
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Re: Charging for projects

Whenever I do work, and its usually print, I charge by project not by time. It may take me the same amount of time to layout a magazine ad as it does to create a web site design and code it but I don't charge the same for these two tasks. Different skill sets have different value so the price should not be the same. Its a little different if you specialise in one area as then you can tailor you hourly rate to reflect the value of the services you provide. So if I am using several different skills and providing a whole host of services then I will charge accordingly. Price is difficult and is unique to each project. You never know what is required often until you are halfway through so in many cases (all cases?) the final cost is higher tha the initial quote. Expenses such as stock media or even getting media commissioned can drive the cost of a site massively. The client suddenly deciding they want a flash banner which I would then need to get done by someone else as I don't provide flash as a service would increase costs. So you never really know how much something is going to cost in reality, you just have to give the most accurate price possible going on the info you've been given. The best way to get an accurate costing is to break down each project to the smallest detail and find out exactly what the client wants. Then you have an idea of the scope of the project and how long it would take.

Some people work out how much they want to earn then add on expenses and divide that amount by the length of the project which could work well as realistically its about earning a living but I prefer to put a price on the services I offer and charge accordingly. I also make sure my prices are competitive though I won't undervalue myself and what I offer.

Also its not about experience, its about the quality of the finished product.
If you are offering quality that others aren't then you can charge more for your services and if that quality is really there then people (or companies/ organisations) will be willing to pay extra to have you do their site, ads, fliers, whatever.

Its worth bearing in mind that I haven't relied on this as I've been a student though I am planning on going full time freelancing this year (sept-oct) so my attitude may change and I do plan on building in some fixed price services to cater to people who are attracted to that sort of thing. None of this has been finalised yet though.

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Old Jul 16th, 2007, 17:18   #3 (permalink)
 
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Re: Charging for projects

This was also answered in last months newsletter. You can view the answer here.
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Old Jul 16th, 2007, 18:32   #4 (permalink)
 
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Re: Charging for projects

Cheers Jacob. I've read this already...I just completely forgot I had! Useful answer though.

Mike
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Old Jul 16th, 2007, 22:28   #5 (permalink)
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Re: Charging for projects

(I feel that I have asked so much of this forum that it is good that I have a question I can give something back to. I may be (relatively) new to web work, but have long term experience in another aspect of design.

I can suggest that fees needn't be an either/or situation (fixed or timecharge).

I have worked with a combination of many - if there is work either you or the client can be specific about, and you are confident that you can do it in a certain amount of time, it is worth working out a fixed figure. The client then has reassurance and can budget and predict costs with some certainty. You have the confidence as well, that you will get paid for the time you've put in.

If there is a chance that either the work cannot be closely predicted at quote stage and there may be more to it than meets the eye, or you think there may be other pieces of work they may add along the way that haven't been specified at brief stage, then state in your quote that such work would be subject to a timecharge rate per hour or day. You could add that such things may take x number of hours and this allows the client to work out for themselves what something may cost overall, once they add up the fixed figure with what they think might be on a timecharge basis.

In terms of what you charge, you could get back to basics and work out how many hours a week you're willing to put in, and how much you would like to earn per week, and see if that gets you an hourly rate. Have in mind the costs of your taxes, materials, expenses and insurances that you need to cover as well as the champagne and truffles you need to survive.

I know of some that knowingly and admittedly charge hourly rates much more than others, but they have an established reputation of actually cracking on with the work so clients take confidence that they may pay less overall, because its taken that designer less time.

Also think about how much a project will mean to your experience, your portfolio, and your reputation, as this may have a bearing on how much you are willing to do the work for. Don't get yourself into difficulty by 'buying' the job and then find your client isn't happy with an increase in rates when it comes to subsequent work.
Some people I know work out what they think the client will pay, or more importantly what they won't pay, and they will price a job on that basis.

My motto is be honest. I would rather a client came back with more work, and made referrals, than I made a killin on each one and never built a working relationship. Hope some of this helps.
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Last edited by Gerry; Jul 16th, 2007 at 22:30. Reason: formatting
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Old Jul 17th, 2007, 01:36   #6 (permalink)
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Re: Charging for projects

Well said Gerry!

I also tell my clients that their quote is an estimate only. If they choose to have me do more work, I will be happy to requote or add in additional charges. I also state that if they decide they need less site than originally thought, that they will pay less in the end.

Honesty is key. Build a solid foundation as Gerry stated, and you will keep the client for a very long time. I have some of my very first clients who have been invaluable in referring other quality clients.

I price out by pages. X amount for X amount of pages. If there is a form, I add more, if there are many more photos than normal, (photography site) I add more. I have "my way" pretty well worked out now but it did take quite awhile to pay myself what I thought I was worth. (That's often a woman's issue... Men often feel much more confident charging what they feel they are worth)

Any maintenance work is done by the hour after the initial site work is completed.
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Old Jul 17th, 2007, 01:52   #7 (permalink)
 
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Re: Charging for projects

Depends on the client and depends how much or little they want me to do....Since my work does include some travel, they alway pay for that and hotel. But those are usually only my long time clients...or as I have been known to say to them...my old,old clients.
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Old Jul 17th, 2007, 16:34   #8 (permalink)
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Re: Charging for projects

For websites I work out a set price based on experience from similar projects I have done before, and an estimation based on time and complexity. This fee should be enough to cover my expenses, pay any freelancers a reasonable rate and cover company profit.

However, a lot of the work I do is maintenence, small graphical fixes etc and I have a long term client who has a complicated web application that requires ongoing updates. This sort or work is charged hourly. My hourly rate is higher than the rate I would charge for a set job as it may be just a few hours work a month.

I wont put my hourly rate down here (as I get some people phoning me pretending to be clients when they are really local developers trying to find out stuff!), but I will say it has increased over the last few years as I have got more experienced and have more overheads such as staff and offices etc. I made the mistake of charging too little at the start and have learnt from that.

In the end, I think you have to charge what you think is fair depending on your skills, location and expenses. For example, the going rate in London is about 4 times the going rate where I am based. As time goes on and things change I think you need to adjust your rate accordingly.
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Last edited by Voodoochilli; Jul 17th, 2007 at 16:37. Reason: typo
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Old Jul 18th, 2007, 22:00   #9 (permalink)
 
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Re: Charging for projects

Cool! Thanks for the replies! Definitely opened my eyes to the fact that there really is no set way!

It all depends on all the factors and personal choices!

Mike
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Old Jul 20th, 2007, 21:52   #10 (permalink)
 
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Re: Charging for projects

Quote:
It all depends on all the factors and personal choices!
and instinct and experience and, most importantly, how good you are at negotiations. Simple?
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