Am I charging too little?

GeneticOpera

GeneticOpera

New Member
Hmm, to be honest that really depends on you. $25 per hour is okay, but if you're getting a lot of business it might not be a bad idea to charge a bit more. There are a few variables to consider.
1. How long does it take you to finish a site? Sometimes people are willing to pay more if they get faster service.
2. Being cheap isn't always bad as more people will be willing to hire you, even for small projects that will only take a few hours to complete, so you can take on more jobs and make more money. On the other hand, if you don't have any problem getting jobs to do then you might try slowly raising your price and seeing how thew market reacts.
3. If you are asked to do simply html sites then you'll want to charge the minimum, but if someone wants advanced coding and features then you'll be workign harder per hour and thus could request more money.
 
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expo09

New Member
The previous answer is right in terms of how much work you are getting. If you are getting lots of work then you may be able to increase your prices (though I wouldn't charge too much extra in one go). But if you're struggling to get work as it is then leave it at the current rate.
 
v2Media

v2Media

Member
That question depends on your competitors and your local market. Forum peers are not a good source of pricing information unless they're also your competitors. Per hour pricing models suit freelancers and employees, not sole proprietors. If you run your own business, per hour pricing is a sure way to sabotage any potential business growth.

Instead of asking about pricing on the forum, ask your competitors. Dream up a garden variety web design quote request and email the top 10 competitors in your geographic location. Use a gmail account with a fictitious name and company and go easy on the industry jargon. I can smell a competitor contacting my company about pricing a mile away - don't make it easy to spot else you'll get deliberately misleading replies ;)

Consider a per project pricing model instead. When you charge on a project basis, profitability is determined by how smart you work, not how long. Leave per hour pricing for ad-hoc jobs like website maintenance.
 
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lolkaykay

New Member
But the top 10 would probably charge a lot more than I need to because they have a lot more experience/skillsets/reputation. I'm just starting out, so I don't think I should be charging the same amount ($100 or more per hour)
 
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ishie

New Member
Your rate is pretty decent, but I think pricing should depend on the type of site you're making as well as the client's expectations and goals. There are other people out there, especially from offshore locations, who charge even less.
 
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RenaissanceMan

New Member
Bear in mind that people (by which I mean prospective clients) will to some degree prejudge the quality of your work by how much you charge. You're providing a professional service and the amount you charge should have nothing to do with your experience, only your skill.

Where experience comes into it is convincing people to pay the amount you're charging, and that effect can be mitigated by your skill.

Charge as much as you're worth, and be picky about the clients you take on. Read Andy Rutledge on calculating hours: the client factors and take it on board. Not all work is good work and some clients will end up costing you more than they make you.
 
optimus203

optimus203

New Member
Rates should depend on:
1) Project
2) Client
3) Location (someone working in New York City should charge more than someone working in Alexander, Kansas).

I always get project details in advance then give my quote.
 
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lolkaykay

New Member
Everyone is giving me pretty vague answers. I've read a lot of articles on how to determine pricing, and telling me my rates should depend on the project doesn't really help me assess how much I should charge. Can anybody just give me a straight numeric answer on how much you think I should be charging based on my past work? It doesn't mean I will take that answer and start sending the rate to future clients, but I just want to know where my rates stand and whether I should be charging more or less.
 
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pyromarketing

New Member
I would be tempted to build up a base of clients at your current rate first. You can become more choosy later on when you have more work than you need.

That said $25 per hour seems a little on the low side.
 
anna

anna

New Member
I think it's hard to determine a set number, but how about $25-35/hour based on your portfolio/experience.

Here is a link to a salary pay scale that might help you determine the average.

Hope that helps!
 
anna

anna

New Member
Good, I'm glad to help!

Sometimes when I've charged more in the past, I've had anxiety over whether I've charged too much and have felt enormous pressure.

If the price feels right, go with it!! :D
 
v2Media

v2Media

Member
WTF? How on earth does a salary scale help determine a charge rate in a business situation? Does the salary scale factor in the costs of running a business, marketing and advertising, account management and client liaison? No. That salary scale is for employees only.

Add at least 50% on top of the salary scale to cover business expenses.

Here's a simple formula for calculating how much to charge if you're going to stick to an hourly rate...

1. Tally up your annual business expenses
2. Decide how much you want to pay yourself per year
3. Decide on how many days a year you work in production or hours per day
4. Determine how much time per week you spend on business
5. Decide on how many sick days and holidays you'll have per year

Example values:-

1. $20 000
2. $47 000
3. 3 days * 8hrs = 24hrs p.w
4. 2 days * 8hrs = 16hrs p.w
5. 8 sick days, 4 weeks holidays

Full capacity annual turnover $67 000.

Total available work days per year = 219
(365 - 8 sickdays - 52 weekends - 28 days holiday)

Total available work days per year - time spent in business admin = 119

Total production work hours = 119 x 8 = 952hrs

Hourly rate required to reach $67K = 67000/952

Hourly rate = $70.38

There may be a calc error in there as I didn't check - but you get the idea.
 
anna

anna

New Member
@v2Media- Have a nice day...


v2Media said:
WTF? How on earth does a salary scale help determine a charge rate in a business situation? Does the salary scale factor in the costs of running a business, marketing and advertising, account management and client liaison? No. That salary scale is for employees only.

Add at least 50% on top of the salary scale to cover business expenses.

Here's a simple formula for calculating how much to charge if you're going to stick to an hourly rate...

1. Tally up your annual business expenses
2. Decide how much you want to pay yourself per year
3. Decide on how many days a year you work in production or hours per day
4. Determine how much time per week you spend on business
5. Decide on how many sick days and holidays you'll have per year

Example values:-

1. $20 000
2. $47 000
3. 3 days * 8hrs = 24hrs p.w
4. 2 days * 8hrs = 16hrs p.w
5. 8 sick days, 4 weeks holidays

Full capacity annual turnover $67 000.

Total available work days per year = 219
(365 - 8 sickdays - 52 weekends - 28 days holiday)

Total available work days per year - time spent in business admin = 119

Total production work hours = 119 x 8 = 952hrs

Hourly rate required to reach $67K = 67000/952

Hourly rate = $70.38

There may be a calc error in there as I didn't check - but you get the idea.
Click to expand...
 
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PixelPusher

PixelPusher

Super Moderator
Staff member
@anna, @v2Media

You both have decent information and both were helpful to the OP. Lets try to keep this positive here please.

IMO, having been a professional freelance designer/developer for 7 years, I have charged clients by the hour in some cases and by the job in others.
Yes the type of client (corporation to mom/pop shop) can make a difference. As a freelance designer/developer if you want more work, there may be times when you need to adjust you pay scale. This relates to what Anna was saying. I also think it is very important to set goals in place that detail expenses and what your time is worth (V2media).

Good luck lolkaykay. The more clients you work with the more comfortable (and confident) you will become with your skill set and pricing.
 
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