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Charges for Web Development 1
- Thread starter Pigster14
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Pigster14,
You need to consider several things about pricing, starting with how much it will cost you to provide the service. And with any new business venture you will need to understand your competitors, for several reasons, though one of which is comparative pricing.
Here's a useful link from a thread in this forum: thread1248-1050401
This outlines the basics of working out your pricing.
The main thing to remember is that cost and price are two different things - understand fully all your costs including how they scale and react to common influences, then work out a competitive pricing model that will exceed your costs. If you cannot cover your costs and remain competitive then you need to take a serious look at your business plan and work out why - or seek an alternative line of business ;o)
Pricing models can scale in correlation to the cost model, or they can be completely separate. You may want to think about the best pricing model for you.. Time & Materials type pricing models are very common for developers / consultants etc, and have several benefits and drawbacks. Another alternative is fixed pricing, which is harder to determine until you have been doing that type of work for a while and can be risky, but can also be more lucrative - and it may not apply to all projects. There are other alternatives, like Cost Plus (but this is effectively T&M for your scenario) or license based models (though this is usually more difficult for web development).
You can mix and match too - but try not to make it too complicated - customers will think you are trying to scam them if it is too difficult to see what the prices are and how you arrived at those prices.
For market research of your competitors, you can simply look for their websites and/or call them for details of their pricing - you'll soon start to see trends in their pricing models and rates.
You should also consider your target market, and or niche services / market angles. If you can find an unsatisfied need that you can satisfy, you may be able to charge more than the conventional developers. One way to find out how much you are 'needed' is to have a look at the job sites for work in those areas - and speak to recruitment agencies, they can be helpful *sometimes*. You will probably find that Web Development is saturated with available resources, who can provide reasonably low cost solutions.
So, pricing works hand in hand with your value proposition - what is your target market? Pre-Built website templates are very common, and enable small businesses that have a little knowledge to get off the ground with a simple site. You may not want to compete in this arena, as there are already plenty of sites that do this. With limited experience, you may not get corporate jobs for a while. So somewhere in the middle is more appropriate, but.. it is the same for most developers - so think about other factors that may guide your sales pitch / market niche - what can you offer that others can't ?
Once you understand these fundamental details, you can start to apply an appropriate and effective pricing model based on costs, market proposition and competitive rates.
There's a lot more to pricing models, such as incentives (e.g. discounted first time rates, or reduced rates for loyalty, or added bonuses - like free hosting for a year etc) or strategic planning (investment planning for new office or new staff etc) or bulk buying / banded models etc. The list can go on and on. But I won't bore you with those details as you will only need a simple model to start with.
Hope that helps,
A smile is worth a thousand kind words. So smile, it's easy!
You need to consider several things about pricing, starting with how much it will cost you to provide the service. And with any new business venture you will need to understand your competitors, for several reasons, though one of which is comparative pricing.
Here's a useful link from a thread in this forum: thread1248-1050401
This outlines the basics of working out your pricing.
The main thing to remember is that cost and price are two different things - understand fully all your costs including how they scale and react to common influences, then work out a competitive pricing model that will exceed your costs. If you cannot cover your costs and remain competitive then you need to take a serious look at your business plan and work out why - or seek an alternative line of business ;o)
Pricing models can scale in correlation to the cost model, or they can be completely separate. You may want to think about the best pricing model for you.. Time & Materials type pricing models are very common for developers / consultants etc, and have several benefits and drawbacks. Another alternative is fixed pricing, which is harder to determine until you have been doing that type of work for a while and can be risky, but can also be more lucrative - and it may not apply to all projects. There are other alternatives, like Cost Plus (but this is effectively T&M for your scenario) or license based models (though this is usually more difficult for web development).
You can mix and match too - but try not to make it too complicated - customers will think you are trying to scam them if it is too difficult to see what the prices are and how you arrived at those prices.
For market research of your competitors, you can simply look for their websites and/or call them for details of their pricing - you'll soon start to see trends in their pricing models and rates.
You should also consider your target market, and or niche services / market angles. If you can find an unsatisfied need that you can satisfy, you may be able to charge more than the conventional developers. One way to find out how much you are 'needed' is to have a look at the job sites for work in those areas - and speak to recruitment agencies, they can be helpful *sometimes*. You will probably find that Web Development is saturated with available resources, who can provide reasonably low cost solutions.
So, pricing works hand in hand with your value proposition - what is your target market? Pre-Built website templates are very common, and enable small businesses that have a little knowledge to get off the ground with a simple site. You may not want to compete in this arena, as there are already plenty of sites that do this. With limited experience, you may not get corporate jobs for a while. So somewhere in the middle is more appropriate, but.. it is the same for most developers - so think about other factors that may guide your sales pitch / market niche - what can you offer that others can't ?
Once you understand these fundamental details, you can start to apply an appropriate and effective pricing model based on costs, market proposition and competitive rates.
There's a lot more to pricing models, such as incentives (e.g. discounted first time rates, or reduced rates for loyalty, or added bonuses - like free hosting for a year etc) or strategic planning (investment planning for new office or new staff etc) or bulk buying / banded models etc. The list can go on and on. But I won't bore you with those details as you will only need a simple model to start with.
Hope that helps,
A smile is worth a thousand kind words. So smile, it's easy!
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