Beauty in profit

If you’re reading this blog, you’re most likely a web designer/developer and you most likely enjoy your job too, but let’s not be shy because as much as we enjoy working in this industry we’re also trying to make a living.

Over the past few weeks, I’ve received a few emails from different people asking for advice or enquiring about my help with digital work (to compliment their print offerings) and the common theme amongst these enquiries seems to be cheap prices/low budgets. Now, I’m all for websites being affordable but there comes a point when you can’t make a living if you’re charging people £300 to make their website.

There is undoubtedly a market in this price range –  for small businesses/individuals who cannot afford anything more than this but it doesn’t necessarily mean this is the market for you. It’s very important to remember that aside from the actual physical work of building the website you’ve also got to win the gig, communicate with the client, plan projects, chase payments and keep your other clients happy all at the same time. If your prices are too low you can’t do all of those to a high enough standard.

My personal business model

It never fails to surprise me how many web designers/developers go freelance and think that means they have to go out and win small business clients and produce the work as well. The reason being because that’s a really difficult thing to do. Personally, my business model is different and I spend most of my work time working on-site in the offices of bigger digital agencies and, more often than not, this work is based upon a day rate. Provided you can stay in demand this is a very good model because:

  1. (Most) agencies know the ‘going rate’ for work and while they may try to negotiate down they won’t expect you to work for next to nothing.
  2. Lots of agencies use freelancers and communicate with each other to find the best freelancers – so once you’ve done a good job at one agency, the word quickly spreads the other jobs come quite easily.

The other advantage is that in most cases, on-site day-rate agency work means that you only work 9-5 (or whatever that particular agency’s hours are). Yes, sometimes this may be longer and sometimes you may find yourself still on-site at 9pm but this is rare in my experience.

An alternative is to offer fixed prices as opposed to a day rate. I sometimes do this but, to be honest, most of the agencies who hire me simply want someone on-site who can work on a raft of different projects so quoting a fixed price is impossible for this type of booking. Every ‘how to be a freelancer’ article I’ve ever read has said you need to work to fixed prices and not hourly/day-rates. However, in my experience – and maybe it’s just the specific type of work that I do – that agency clients simply don’t want this.

A quick word about day rates

You set your day rate to account for the fact that you won’t work every day of the month – if bookings dry up, you need to take holidays/sick days or you need to buy new equipment every now and again.

Agencies hiring you won’t expect to pay you the equivalent of their full-time staff e.g. if their staff get paid around £30-25k per year ( averaging at £100 per day) they won’t expect that your day rate should be £100*. Whereas, if your target market is small businesses you may find yourself justifying your day-rate/overall prices constantly.

* If the agency looking to hire you does expect you to work for £100 a day then you simply move on to the next agency who understands industry pricing levels. If an agency doesn’t get freelancer prices it’s likely they’re undercharging for their own services and if they’re getting the fundamentals, like pricing, wrong what else are they getting wrong?

Summary

I hope this post serves as an answer, for the next time I get asked if I can produce a website for next to no budget or if a family member/friend refer on a colleague (who has a great idea for an ebay/facebook/google clone) because they think I pull websites out of a hat for £300 a pop.

9 responses to “Beauty in profit”

  1. This is good advice for those that freelance to agencies. But you don’t offer too much advice to those that do choose to do private client work. True, none of us should consider accepting £300 jobs, but there is also a market for small business who are serious about their spend but, perhaps cannot afford agency rates. I have some clients who choose freelancers over agencies, as they want to avoid the overhead of a city-centre office and account manager built into an agency quote.

    A good all-round developer should be able to build a small CMS business site in 3-4 days. There are plenty of business’ that will spend £1200-£1500 on a simple site,and many more with £3-5k to spend on bigger sites. That sort of money can go a long way with a freelancer. How far would it go in an agency?

    I’m not saying it’s as easy or lucrative as agency freelance work, but it can be rewarding. I calculate my costs for developing a client site using a day rate. I estimate the effort in days for each element of the project, and add a buffer to allow for project management.

    Your comment about 9-5 is the most valid. The biggest issue, I find with freelance work, is not the pricing model, but the work schedule. Expect to have several jobs on the go, and sacrifice your evenings when there’s work to get done.

    • Good comment Howie.

      It’s hard for me to give advice to people who do private client work as I rarely do it. I do take it on now and again but I do find it tends to be more complicated.

      The 9-5 life is the one thing I like most about my work. Often, as well it’s far less stressed because agencies call you in to assist the team and consequently you know the collective responsibility for the project is resting on more shoulders than just your own.

  2. Ah, now, you may say that, but my nephew/dog/taxi driver/rabbi/care worker says they can do me a logo and a 5000 page website with 573 images per page for 30p all-in, or 40p including hosting FOREVER, aftercare, unlimited lap-dancing and shrink’s bills in perpetuity.

    In light of that, how can you possibly justify this article?

  3. The two freelancers I know who soley work for agencies, they have much less stress than I do, unfortunately as I now live an hours drive outside the most remote city in the world (Perth) I don’t find it easy to pick up agency work (although it does come along time to time).

    You’re on to a good gig, but I don’t think it’s soley the fact they are professional agencies who know the ‘going rate’, I also think there is the personal contact issue – morally most people can’t pay peanuts to a professional who is in their offices for 8 hours a day, 5 days a week. Another point is when working in someones offices they can see just how much work and skill goes in to each aspect of a project, when a small business asks for a site all they see is pretty graphics, bit of animation and some text, they will have no idea of what goes on behind the scenes, the costs, the skills, the technical know how, etc – they think they can either buy a $100 site from a freelance website or even get one for free from Microsoft or Google, so why would they want to pay $3k or $5k?

  4. Good post as always. “How much to charge” is always a very tricky issue, and it’s often a balance between what the website is worth, what the client can afford, and what the client wants to pay.

    I would say that a small business who “can’t afford £300 for a website” won’t be in business long. Even at the lowest level, £300 is surely a realistic sum to spend for anyone running an actual company, ie, an entity that makes money. £300 for an individual is perhaps another issue, but honestly, if a business can’t find £300 for an online presence — which in many areas is a vital advertising/communication mechanism — then it’s doing something wrong.

    Or, more likely, they’re focussing their spend in the wrong place, or they simply don’t value their online brand. I suspect that a company who claims not to have any budget for a website will cheerfully spend a few hundred pounds a month on print advertising. I’d argue that an online spend offers better value for money, but then I would. For some businesses, print advertising might be a better option. Either way, it’s a case of “what we want to spend our money on”, rather than “what we can afford”. If a company wants a great website, but only wants to spend £300, then they can’t have a great website, in my opinion.

    I’m also interested in Howie’s comment that “A good all-round developer should be able to build a small CMS business site in 3-4 days”. Personally, I’d respectfully disagree with this. I can only speak for myself, and I’m sure Howie’s model works very well, but in my experience this just isn’t possible.

    I’ve found myself in the past thinking, “Well, it’s only a simple HTML build, and I can plug in my standard CMS, and then just drop the content in. It’ll be easy!”. I agree that it is indeed possible to get something up and running in a few days. All too often, though, you then spend a few more days fixing minor issues, and tweaking the site based on client feedback, and revising some templates, and then some of the content needs updating, and then you need to upload the site to their server and so on. Before you know it, that “3-4 day project” has taken seven or eight days in total.

    For any Content Managed site, I’d always quote a healthy amount of time, to allow for contingency and to be up-front about how long it will actually take to deliver the finished, working website in its entirety. That’s not a case of squeezing budget from my clients, it’s a case of making sure that everyone has realistic expectations. Telling a client that it’s “3-4 days”, if it then takes me twice as long, is in no-one’s interests.

  5. I agree with Chris’ point. I think completing a small business site in ‘3-4 days’ is generally going to be a really tight squeeze assuming you are going to do a professional, high quality job in line with the rates you charge.

    I would say that quite often small business contacts often require far more contact/account management than larger businesses – they are quite often commissioning digital work for the first time and don’t necessarily understand how to play their part in making a project run as efficiently as possible.

    I get a fairly regular stream of enquiries with a budget more akin to what you might spend on a fridge freezer than a website – I guess all you can do is explain the process you take and highlight why it is worth paying for an experienced professional rather than the next door neighbour’s brother’s friend’s son.

    • Good comment Simon. I too agree with Chris. In my experience, websites that feel as though they may have taken 3-4 days actually, on closer inspection, have taken a lot longer. This is due to lots of reasons including the client making changes. Also, if you factor in design work then your timescales can increase dramatically as you show iterations to the client, explain design decisions and wait for approval.

      Make no mistake, there client work out there that pays well and is commissioned by people who know what they want and have realistically budgets in mind. Personally, I don’t seek out projects like this as I find the agency work much easier to come by – but they do come along and I’m grateful when they do (I’m working on one right now).

      The important thing is not to fall into the trap of producing lots of low priced sites for small (and, it has to be said, often) difficult clients – I just don’t think it’s a good business model and it baffles me how many people go down this route when they start out on their own – then when they fail they act surprised.

  6. I’ll probably take some stick for this, but on occasion. I actually do take on those very low budget jobs. Why? I think it’s because sometimes a client comes along and I really want to help them out. I find myself in a unique position of really being able to make a big difference to their business. It’s quite rare that I do that, but it’s a great feeling.

    It’s a funny thing though, in my experience of working at both ends of the budget scale, more often than not, it’s the clients with less money that are the more difficult ones.

    • Dave, I think that’s great and yes, if you can afford to do that and enjoy it then why not. The problem starts when web designers just take on those small jobs and don’t ever make a decent living for themselves.

      Also, I don’t think you’re alone in finding low budgets clients to be more difficult.