|Need Advice - re-started home based business|
Approximately three weeks ago, I submitted my resignation as the Marketing Director for a national franchise company that over promised and under delivered; plus many more stressful reasons. Actually, if I told you the entire story - you would probably be knocked out of your seat laughing or in awe :-). All of that aside, the primary reason for making such a decision was based on my employee evaluation and the promise of an incentive plan for increasing the leads from 50 a year to well over 500 a month and climbing. This promise was made to me on several different occasions the first being in June of 2006 and again about five months ago. Upon resigning, I offered to continue my services at $35 an hour. I have 17 years hands on marketing experience (from print advertising in world renown magazines such as Entrepreneur, as well as their website, creating strategy guides for video games to creating high ranking websites). They have accepted my offer of $35; however, during my last meeting as an employee last week, the founder asked for quotes on several items. I informed her that a 6 panel brochure (from concept to finish would be approximately 40 hours. This is just one of tasks I performed for them as an employee at $20 an hour. She baulked and stated that is $1,400! Now they would like me to quote per project (not hourly). It has been approximately two years since I have worked on my own and I figure that things most likely have changed on the income potential from working from home. I need some feedback on what is the going price for website design including SEO. They would like me to create a contract generating website (from concept to SEO) and I need to provide them with a solid quote. Also, what would your requirements be? If you have any questions, please ask – I need all the help I can get right now.
Thank you very much for your help.
How many pages would this site be?
Will it be static html or dynamic?
Are you writing any code?
Are they providing content or will you be writing it?
Are they providing images and graphic design or are you?
Welcome back to the folds of self-employment. I have been at it for over 4 years now and I can say with total confidence that a team of wild horses could not drag me back to a "job" ever again.
|what is the going price for website design including SEO |
While I see where the poster above is going, I think you are asking the wrong question. Who cares how many pages the site is or what it will do. The real question the prospect wants to know is how is this going to help me make money. Answer that question and then show how your fee for making this happen is only a very small part of all that new profit they will make with your solution. If you do this part of the sales job well whatever fee you get will be well worth your time and compensate very well for your efforts, all without ever having to add up how many pages it has or what functionality it will come with etc.
I wish I could say I was smart enough to think of this concept, but alas it belongs to Alan Weiss. He came up with the concept of value based pricing years ago in his original best selling book "The Million Dollar Consultant" and clearly shows that you must get the prospect to agree with how much value what you are proposing will give them. The next step is to show how that value continues to grow year after year and finally how your fee to make all of this happen for them is a minute piece of that value, even though such a fee could be many times higher than you would ever get by simply quoting based on hours.
If you can't get them to agree on a high value for the project you will always be looked at as a cost and costs are things you try to keep as low as possible. On the other hand if you show true substantial value far and away above whatever cost it takes to get there then cost never enters the conversation.
An example we can all appreciate, if I was offered a fast growing web site with 10K worth the monthly income and incredible prospects for $100K selling price I would quickly figure out that I would make all of my investment (key word) back in only 10 months and still show a decent profit by year end. Now imagine what will happen in year 2 and 3 and 4... You get the idea. However if you simply told me you would design a site for me at a cost of 100K I would tell you to jump off a bridge. Same project, totally different positioning and marketing and hence results.
Actually, I agree that it's the wrong question.
I think the right question is something more like, "you are expanding your client base, right?"
The former employer has an established track record of not following through on commitments and expecting better work than they're willing to pay for. I don't think it's reasonable to expect that will be any different post-employment and will quite probably be worse.
It seems to me that the company has already demonstrated that they're not willing to pay for things based on the true value they receive.
|I think the right question is something more like, "you are expanding your client base, right?" |
Very good! I like that, probably another good question to keep on hand when you are trying to prove the value of your case.
However I should add one caveat from above. Even if you do value pricing based conversations with prospects you will always have some that will never see the value or even if they agree with what the value is they will still try and say paying you $1,400 is not worth it despite the fact that the value you create is waaaayyyy beyond that.
I believe in those cases you try to get yourself out of the meeting as quickly as possible and move on to other prospects and projects. They will never change and you will never be paid what you are worth.
You all are fabulous, I am truly grateful for your responses. Yes, they are definitely not willing to pay me my worth. They counter offered my brochure bid yesterday at $20 an hour; I was making $21.00 when employed by them. This was very insulting and I stuck to my guns at $35 per hour (which they accepted after I informed them that my hourly fee is not negotiable). I am definitely not spending my quality time on their projects in the near future; but for now it is the holidays and I have children to feed. I have more news to share regarding my accomplishments while employed with them; however, I can not make any public statements until the 12th - I will definitely be tooting my horn then :-).
Also, I met with a new client yesterday and he would like me to manage a complete print/online marketing plan for him. The future is so bright - I gotta wear shades.
|but for now it is the holidays and I have children to feed. |
I think anyone that has been self-employed for more than a few days can appreciate a comment like that. I know I have taken on work where I was underpaid and under appreciated. I think every self-employed person I have ever met has done the same thing at some point in their career and some are still doing it!
The key is to remember that these are not your best clients and it does get much better. Keep in mind while you are working on it that this is simply a stepping stone. However make sure you are aggressively marketing and building a portfolio all the time. If you do that eventually clients like this will be a distant [bad] memory.
I'm new to this forum but not to the subject in question. For a number of years I have been a consultant after quitting the rat race 10 years ago. The nature of a company owner/executive is to get the best quality for the least cost but it should always lean to the quality. If it leans to the cost then run a mile because you can bet that you will be harassed and hounded on every issue.
Look the problem with people wanting web site projects done is that they have, in the main, no idea of what it costs or the work/expertise involved. Where they would pay a Plumber $60 + an hour and think nothing of it or pay their lawyer/accountant $300 an hour, they quibble at $35 for your profeesional time.
I would not look at any job unless I had a minimum charge built in of at least $150-200 per hour. You have to sit down and figure your overheads including the hours you spend negotiating, traveling and researching, those behind the door costs that are not evident on the surface.
Having your own business is the first step to wealth if you handle it professionally and deliver quality.
I wish you well and welcome you to the self employed field but as a side, I have been consulting for a group who are guys similar to you who have got together and using their skills have developed a new business model. Type Mass Traffic Network into Google and you will see them allover the 1st and 2nd pages.
I don't know if that last post was completely disinterested or a bit of self promotion snuck in there, but I totally agree that your price should be closer to $150 - $200 per hour.
I use freelance programmers in Romania and Siberia and NEVER expect them to work for less than $35 per hour .. One of the worst programmers I know, a guy who is sooo poor on delivery and communications gets $80/hour for long term jobs.
So, stick to your guns - but better still, go out and get a new client, one where you haven't already set the price expectation to such low levels. fwiw, I'd also be very inclined to quote a per job fee, not an hourly fee.
Thank you, again, for your responses. Having been out of the independent contractor scene for about two years, the pricing portion does stump me the most. I agree, I would much rather bid by project not by hour. For example; they would like me to quote on maintenancing the current website as is (uploading new press releases, branch website data, etc.), a quote for re-designing the current website (which is approximately 50 pages in English and 50 pages in Spanish) and creating an entirely new website to generate additional leads (most likely the same number of pages as the current site). Apparently, they have already received bids from two other website designers (no big surprise there). Are there any websites out there that help independent contractors bid jobs (print and web) as accurate as possible? The only resource I could locate is in my Graphic Designer Guild Handbook.
Thanks again for your help. I am still working on my own website right now and am not that desperate for the work; however, I would like to at least submit my bid for consideration (it's just who I am:-). I am sincerely appreciative of all your responses and time. By the way, when I started working with this company (Jan. 06') their overall Entrepeneur Magazine Top 500 ranking was #178 (Dec. 05'), they then jumped to #31 (Dec. 06'), and now they are #20 (Dec. 07'). I was told that I had nothing to do with the increase of the numbers (which is exactly what I expected them to say).
When it comes to pricing remember the old saying...
"Quality, Speed, Cheap, pick two"
Not sure who came up with this saying, but I love it. I think it says a boatload in only a few words.
When you guys mention $150-$200 and hour. You guys must be lightning fast at whatever you do, or you outsource everything, or I just don't have a clue. Even a minimalist site will take me at the very least 10 hours if I'm going to put my best into it as far as character and eye appeal goes. Ya, I can slap a layout together, contact form, links and a few pages for $150, but I would call that a mock-up not a web site.
Please enlighten this thread a bit more as I'm confused.
|Even a minimalist site will take me at the very least 10 hours |
$150 times 10 hours = $1,500.
I wouldn't touch my keyboard for less money than that. If web development is ever going to become a truly respected field and viewed as a "professional" trade we have to stop pricing our services at $150 for a web site. In my opinion those are starvation wages.
A professional advertising agency would laugh at such low rates but as developers some of us leap at those prices. Why are we any different than an ad agency our medium is the Internet instead of print or TV, but certainly no less valuable than those mediums. In fact, I would argue we might be the MOST important medium in marketing today.
Just remember if you don't believe you are worth it neither will the client. In addition, if you don't stand up for what you are worth neither will the client.
I have a client that I also do business with and I'm becoming friends with. I brought up a web site redesign that I'm doing for bartered items over the course of this year and to help develop my portfolio.
We're going slow on the redesign since there is no hurry. I've probably been at it just over 3 weeks on a part time schedule. I have a good 30 hours into the site. Outside of the layout and graphic work, there really is nothing to it. Retail I would charge about $800 because the graphic work came out better than expected.
Funny thing is, I secured this job 4 months ago, with plans to start on it sometime this year. Between the time I secured the job and now, the customer had told me over friendly conversation that no less than 40 people asked to build him a site. And out of the people that did mention a price, no one even touched $500.
I did a website completely in flash per customer request. A nightmare of a job as flash wasn't the best solution, but that was the trend in his market and was what he wanted. I put in over 150 hours and made $900. I was not the lowest bidder nor the highest, and all bids where local (nothing overseas).
I want to work in your market or take sales lessons from you. That $150 site/mockup can be downloaded for free, with instructions on how to use it.
$150/hour is fine for doing professional work. But not for uploading press releases, branch data, cropping photos etc.
Bill $150/hour for your time spent programming, designing and the like, and then $25/hour for the much less skilled guy who does the grunt work requiring no greater mental ability than a McJob
|Are there any websites out there that help independent contractors bid jobs (print and web) |
From the other side, when I want figure out how much I should pay for a project to be done I go to the freelancer websites and search for similar projects.
For example a 'link building' project; when I wanted to find out an average bid for this type of project I did a search on elance and came up with very specific numbers for each type of link available (and some great project descriptions as a bonus).
Researching the freelance sites might be helpful to you for getting a ballpark idea of how to price certain types of projects.
The top listed web designers/programmers at elance are not making $150 an hour. More like $5-$15, and they are doing top quality work.
"I wouldn't touch my keyboard for less money than that. If web development is ever going to become a truly respected field and viewed as a "professional" trade we have to stop pricing our services at $150 for a web site. In my opinion those are starvation wages."
I wish I could agree, but there are so many web designers out there that it a customers market. The customer has so many choices he/she can pretty much name their price. Someone will take the job even if it is just to add to their portfolio. So I have to follow suit to be competitive and hope I can establish a foothold in something I love to do, even if I'm only making $3.00 an hour at it right now.
How depressing is that? It's like to gorgeous girl in high school. Everybody wants to date her and will do almost anything. Being successful somewhere in web marketing is the same way. Work 20 hours a day 7 days a week at slave wages just hoping things will work out. I guess doing what you love is worth it though.
|I wish I could agree, but there are so many web designers out there that it a customers market. |
I live in a medium sized city in the mid-west that has a lot of blue collar workers in it. Most the businesses are small to medium sized companies. I have charged around the $150 mark per hour since I started the business over 4 years ago. I can count on one hand the number of times I have taken on a new project for less than this and by less I mean $100 per hour. The work is there, but you must sell it and you can't be selling just web design. You are right simple coding and design is a dime a dozen, but true Internet marketing is not.
|Someone will take the job even if it is just to add to their portfolio. So I have to follow suit to be competitive and hope I can establish a foothold in something I love to do, even if I'm only making $3.00 an hour at it right now. |
I probably won't convince you of this in a post, but you are selling yourself short. When I started my company I was very good at marketing and had a good knowledge of Internet marketing, but I had two web sites in my portfolio. No, that wasn't a typo that was 2 web sites and they were both mine. I slowly built up my portfolio from that humble beginning, but I promise you I still never charged less than $100 per hour. The skill you need to sell is the marketing. Don't sell a commodity like design and coding or you will be priced like a commodity...low.
I guess how you see this issue is relative. I have a consultant that I know that has been in business 28 years on his own. He works out of his house and has no employees. Last year he made 1.4 million. For me that is almost too much to imagine for a single year of work for a lone consultant. He isn't in some highly sought after field. He is a management consultant. He has just learned how to brand himself and charge what he is worth. He would look at what I am charging and tell me I need to charge more that I am not selling value. I simply can't imagine that at this time. Again, I guess it is relative.
|$150/hour is fine for doing professional work. But not for uploading press releases, branch data, cropping photos etc. |
I have to disagree with you on this point. I agree this is simple work, but I know how to do it and the client doesn't. They don't want to learn and I already know how to do it. I could charge less, but at the end of the day I have only my time to sell. Once I am out of time then I am out of inventory to sell. It is a basic economic principle to try and maximize the price you get for your inventory or supply, which in this business is time.
However as you pointed out this is simple work so I can also do a lot of this very quickly. Therefore while they may be paying $150 per hour for "Mcjobs" in most cases I never even approach that price for a bunch of these little tasks, even if I add them all up. I can do them very quickly. The client is happy because they don't know how to do this and don't want to learn. I am happy because the time I expended was well compensated. That should be the goal of any professional.
Take attorneys as an example. If you hire an attorney to set up a corporation for a simple business for you they will print off some forms from the state and fill them out for you. They will print off what amounts to a boiler plate operating agreement, maybe make a few minor modifications for your situation and viola, charge you $200 bucks per hour. I could probably do that, but I don't know how and I really don't want to learn. Using your argument that this is easy they should be charging me $20 per hour, they are simply filling out a form. Also it isn't because lawyers are rare and in high demand. 1 and 5 college grads is a lawyer.
My point is because a job is simple or easy doesn't mean you should charge less. If the client doesn't know how to do it and doesn't really want to learn then they pay professionals to do it for them. That is how an economy works. The rate one person pays another for a job as long as it isn't under duress is what our system of economics is based on. They are free to learn the task themselves, find someone else for cheaper, or go without it. They are not allowed to tell me to do the work and dictate what price I will charge. I have the right to say no and walk away, which I do for less than $100 to $150 per hour.
Awesome post especially this line:
I have the right to say no and walk away, which I do for less than $100 to $150 per hour.
I imagine many folks will get something out of your post. I did, although I know I'll never have the kahunas to charge that much, but it was inspiring none the less!
|I know I'll never have the kahunas to charge that much, |
I don't think this takes "kahunas" as much as it does respect for your own time and value. In my case I would rather do some additional marketing for my business, write some articles, or just do something fun rather than work for slave wages.
I know someone will argue that some money is better than none. I just happen to disagree. My time and value for myself is more important for me. If someone doesn't want to pay my price I could lower it to compete with the high school kid that is doing it for beer money, but then I would be cheapening my time and talent and I won't do that.
I will say this is a personal choice every person that is in business and only has time to sell must make for themselves. What is right for me may be totally wrong for someone else. What you charge and what you price you walk away at is a totally individual decision, mine is less than $100 per hour.
You are making the all to common mistake of selling your time, not your expertise. As others have said, coding can be done by someone in India or Bulgaria for $10 an hour, but developing a fully integrated marketing system is something that far fewer people will be able to accomplish. The barriers to entry in many fields that charge upwards of $75 an hour are very low, yet those in those fields still manage to maintain their hourly rate.
The bottom line is that you're a marketing consultant, not a programmer. You have specialized knowledge that others need to be successful. You need to demonstrate to them that their success is worth what more than you're charging them and they'd be foolish to sell their business short by using someone without your qualifications. The other benefit to this is that you can be more selective. Those business owners that are too cheap to pay for you are, in many cases, the most problematic to work for anyway.
|You are making the all to common mistake of selling your time, not your expertise. |
Absolutely! Value based fees are how everyone that has had to learn an expertise should be pricing their services. Charging by the hour can even be a ethically a problem according to the consultant Alan Weiss.
|Those business owners that are too cheap to pay for you are, in many cases, the most problematic to work for anyway. |
Right on the mark. I try my best to ferret out these people on the phone when they call me and then quote my typical rates to get them off the phone. I will never waste the time to even meet with them as even that act has cost me money. It may sound arrogant, but if you are going to grow your business you will find there is a certain level of client you can no longer serve and do your best to not even meet with them.
The famous bank robber Willie Sutton once was asked the question why he robbed banks and he replied "Because that is where the money is at!" It is no different in our business I spend my time and efforts with the people that have the money and leave the ones with lower budgets for someone else to deal with. I go where the money is at.