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I own and operate my own company but only employ myself with the occasional subcontractor for specialized programming (yea, the kind where we just can’t know everything). The dilemma I am in with a particular client is that they take up so much of my time, the monetary gain is nothing, if not negative, which in the end impacts me trying to take on more work in the end.
I really do not know where I am going with this whole topic but I know the input I have received in the past helped me greatly in business and now I find myself in a position where I could use some of that input again. I am one of those that realizes there is always at least 10 other people who have gone through the same thing and if even two of them share their opinions, I would be greatly thankful.
Anyways, on to the part of growing some gnads. I will try to be brief but I think it is important to try best to illustrate the situation – always helps to vent on a forum anyways :)
I started my web design work about 10 years ago. Approximately 7 years ago I started working with a start-up company. The work in the beginning was minimal at best but did involve a refreshed web design look every year or so as the company grew. I work remotely from their location.
The company really started to grow about 3 years ago and that is where my work started to take on a very significant ‘face’ to the company. At this time, I had monthly duties along with daily duties that I was responsible for. I worked at that time about 40 hours per month and billed $1200.00 per month. It was decent work and nothing too extreme; everything was more along the lines of maintaining the web site. Web site revenue at that time was nil even though I knew there was revenue out there to earn; they just never listened to me or took me up on my suggestions.
Three years ago, they hired someone for their internal office but “who would also oversee the web work” – they would be my go-to person since as the company grew, the web site grew and so did my ideas and methods of dealing with the work. This go-to person never ended up panning out to be someone that I could bounce off ideas off; instead they worked solely internally with the company and also began to sell web site advertising.
About a year and a half ago, because of the workload of the site and the increase in my responsibilities – such as extensive database programming, Flash, web site management, etc. – I doubled my fee to $2400.00. At that time I ‘was’ working 80 hours per month but things have changed since then.
Bare with me, I am getting there....
Last year they started handing off more work to me for the web site and the daily duties I needed to perform, grew as well over this whole time proportionally to the business. My hours averaged 120 per month last year but still at the rate of $2400.00, as it is today. It was fine in the beginning to be honest because the web site was kind of my pride and joy since I was there from the beginning and helped the odd time to help me bring in a client or two.
This start-up company now has their own office, employs 8 people fulltime (not counting me as I am a contractor). The owners have done very, very well for themselves as they should, since they have been very successful in their business. They went from living in a nice house to a million+ home, from a Chrysler Intrepid and minivan to 2 “very, very, very nice cars” and a minivan. I am not knocking them at all, but I think it is important to share this to help illustrate my position.
I have asked for about 6 months now to sit down and review my work with them so we can come up with a new rate for me to charge. Each time I am put off or told one of their newly-found business terms why they really have to be careful with how and where they are spending, even though they just brought on a new internal employee 3 months ago with a salary of $75,000+. They will hire others, but not consider my workload has grown too.
I asked again today but was told it would be another month before they had time to sit with me. I almost threw in the towel right there but bit my lip as I have a good idea of the pain and suffering I would have had thrown down on me by my better half when I got home. So back to my office I came and finally sat down and wrote this, something I have been thinking of doing for a bit now.
Now, I should say that I could just walk away. But let’s be honest, $2400.00 a month is $2400.00 a month. I also realize I could probably make that money up each month with my own sales - but the recession thing does make me a little concerned.
I do think this is important to relate and I do hope it is not taken the wrong way. Not to blow my own horn, but I am one of the lucky ones that can do web programming (database work) and make it look nice to the end user. Sorry if I have offended anyone but I have realized over the years that most programmers/designers can do one or the other. Thus, I seriously do not think I can be replaced with just one person. They most likely would need one programmer and one designer, but I could be wrong and probably am. On top of all of this, I can assure you that no one out there knows this particular industry that this company is involved in as well as I. Not bragging, it is just an industry I know extremely well, was involved with even before I had my first computer. Anyone trying to fill my shoes would have a hard time for a while and would need a lot of guidance and hand holding from the owners. This is one of the other benefits I bring to them.
Enough of the babble, I will get to the just of it all now....
The web site is only a small facet of their business.
- Web page views per month are 400,000+ with about 40,000 unique visitors
- Web ad sales last year were $300,000+.
- The quality and depth of my work has increased.
- My workload as grown to 140 hours per month. (Still making $2400.00)
On top of all of this, my position requires me to be available to them during working hours as well as the occasional evening. In addition, I manage the dedicated server and am responsible for it 24/7. One of my responsibilities is work that requires me to either stay up until 2am or wake up and start working by 6am. The benefits of a home office I guess. The missus hates it, but it works.
I guess in a way I just want them to appreciate all that I have done for them, to get that missing recognition and for them to finally realize they have a good deal with me but it is time to step up and give me the level of respect I know I deserve, along with the financial recognition as well.
I am realizing after finally writing this all out, it is quite a sad story. Perhaps it is time for me to be the type of business people they portray to me and be that more demanding of them as they are of me.
Perhaps, it is just time to grow some gnads and walk away. I think I could make it, just a little tough thinking of walking away from a $28,000+ per year contract. I am just tired of being ‘undervalued’ but maintenance contracts do provide some stability I have found.
Wow, only $28,000 – creates a whole new perspective when you actually see it in writing! I guess that says it all right there.
With all this said now, what would you do if you were in my position?
If I were to get that sit down with them to review my fee, knowing I am responsible for the server and web site 24/7, need to be available off hours, 140 hours on average of work a month, what are some of the thoughts you might have? Throw in some numbers if you want as well.
140 hours a month is 1680 a year; or 32 hours a week: 6 and a half hours a day Mon-Fri. Adding on 25% for your overhead time (invoicing, billing, maintaining facilities, buying consumables, being on call 24/7... etc) and that's a healthy 8 hour a day job equivalent to a full time 9-5 grind.
Now, what do you think they should be paying you to provide the equivalent of full-time webmaster services? Most certainly it should be at least 25% more than they would have to pay someone in-house; because they don't have to pay for your medical insurance, sick leave, liability insurance, payroll overheads, office space, computer equipment, redundancy / notice payments, etc. etc. That means when they pay you $28k it's the equivalent to them of paying at most $22.5k to someone in the office.
Do you think, given your location and their requirements, they could find a suitably skilled full-time webmaster able to understand their site inside out, as well as administer their server 24/7, by offering a pay of $23k a year? If it were doubled, to $46k? Doubled again to $92k getting close yet?
Other than that, I recommend reading "The 4 Hour Work Week." He has a chapter in there on dropping clients who annoy you too much or take up too much of your time as you are making less money per hour with these clients.