If I had an hour to solve a problem and my life depended on the solution, I would spend the first 55 minutes determining the proper question to ask, for once I know the proper question, I could solve the problem in less than five minutes.

We, as people who solve problems using web technology, need to bear that in mind.

The act of ‘building‘ is only one element of what we bring to the table. In reality (and this surprises many people) it may not be this element which adds the most value.

Experience

For many of us; it is our experience which the client is buying in to. It is our experience which guides us to elect the best path for client to take. Our experience allows us to plan on the client’s behalf. Once the planning is done; the actual execution can almost become a secondary task. Almost.

Let’s try and give this some context. Yesterday, Ruby/Sinatra smarty Tim Millwood tweeted this:

#FreelanceProblems: unpaid project management sometimes takes more time than the paid development work.—
Tim Millwood (@timmillwood) December 11, 2013

…aint that the truth!

As designers/developers our natural instinct is to think:

How long coding or in Photoshop [INSERT TOOL OF YOUR CHOICE] will this task take me?

And that “coal face’ element of the job is indeed a factor in how much we bill. But you must also focus on all the other bits which need to be accounted for as well (e.g.)

• Scoping the problem with the client
• Negotiating with the client
• Meeting/emails
• Preparing documentation
• Setting up the client in your workflow
• Organising your workflow/team
• Invoicing

…that list goes on and on

All of those elements need to be billable; because someone has to pay for them. And you’re in business to service clients. And if these expenses are incurred in the pursuit of you executing work on behalf of clients; then you need to remunerated.

And we haven’t even mentioned bills, computer kit, training etc.

All of this stuff has to be paid for. And, when you recognise that fact it helps you work out your pricing; because your pricing needs to be high enough to cover all of the elements required for you to perform the duties of your work. If it does not, you are losing money. And that is bad business.

Invoice line item 34 : Yoga for my Wellbeing

Now I’m not saying that you need always to be explicit with your invoice line items (nor am I saying ‘be devious‘). If you think your client will query the time spent answering their emails or general project management then either work hard to educate them or, as a short cut, include those costs into your dev time. It doesn’t bother me how you do it – just make sure that you get paid for your work (and all of it).

The planning of work and the handling of the client can ended up taking as much time (if not more) than the actual ‘work‘. But it is a crucial pre-cursor to getting the dev work done in the first place. So don’t be ashamed or reticent about billing for it.

Hopefully that has given you some food for thought: let Einstein help you earn more money.

Joel

This upbringing has left the shadow of working class guilt; the thought that making money must be bad. That it must intrinsically mean that someone, somewhere is being exploited; that somehow we have done something that is corrupt & rotten. Well, let me paint you a different picture; greed is good.

That’s a pretty incendiary thing for me to type; for all the reasons I’ve hinted at above. And certainly because of the Gordon Gekko connotations.. And, in fairness, I don’t really mean greed; I’m actually talking about profit here.

Profit: The Besmirching Party Pooper?

Sometimes we, as an industry, seem ashamed to turn a profit. To treat profit as if it is some sort of besmirching party pooper which gate crashes our festival of creativity. The thing is though, we can’t be ashamed of talking about money. And we can’t be ashamed of making money.

We do what we do because (hopefully) we genuinely love web technology and how it can help people. It’s a fast changing industry and that suits us down to the ground. But, as hinted at elsewhere in this blog, those skills and that passion alone are not enough to run a successful business. And, at its heart, a successful business needs to make decent money.

The Working Week Fallacy

Perhaps you are in a situation where you bill hourly (which helps divorce you from the expensive threat of ‘scope creep’ on fixed cost projects); if so, make sure that your hourly rate really covers all your costs. A big mistake I made when shifting from contracting (a bum on a seat at an agency) to freelance was doing my calculations and working out that I needed to charge (say) £25 per hour to make a decent living. The mistake I made was not realising that, in reality, you don’t bill all your hours and you are only productive for (say) 60% of the week. How you bill needs to reflect this or you won’t be in business long.

You need to be charging enough to pay for your new MBP, to allow you to go to conferences (hint!), to pay for training, to allow you to spend a day in a gallery or exhibition recharging your creative batteries. Yes the client needs to foot the bill for this (I’m not saying as directly in a line item on an invoice!) because it is all of this which allows you to be good at what you do. And that is what the client wants; you to be good at your job as that is of benefit to them.

The Employment Dilema

If you employ people or freelancers then the business needs to make money on them per project. Otherwise you are simply a clearing house for work which is actually losing you money; and that will ultimately result in only one outcome.

You need to look at projects with an eye to how your business can make money on this; sure be giddy with excitement with what you can do for the potential client but if they can’t afford your services or can’t afford the full service; then you need to react accordingly. By all means choose when you want to work for below cost or for free (e.g. for a charity*) but let that be your active choice rather than something you simply drift in to.

(*Note: I’ve been sat across from marketing managers who plead poverty but who are earning more than you are. Again, choose carefully when you give your time for free/below cost).

The Bottom Line

I earned the best money when I was contracting on an eCommerce site for a large supermarket; but I hated the job – so money isn’t everything. I’ve never been happier working for myself but the toughest days all revolved around not having enough money (caused by a multitude of mistakes). The stress that causes flows over into family life and effects everything you do. The flip side, is that when you start getting some of the basics of money right, it has the same ramifications outside of work; everything is happier/easier. You can take time off, go on holiday etc without stressing about money etc. And, guess what, that allows you to be better at your job.

Our business’ need to make money.

Joel

p.s. The Business of Web Design conference is coming to Cardiff in July 2014 – there is a call for speakers here.

If the client’s  initial response to your ball park quote/similar project quote or proposal quote is a query that the price ‘seems high‘ then you really need to have a crafted response armed & ready.

Where I went wrong…

In the early days I think I would be offended when a client queried the price; I would want to shake them and say “now listen buddy, did you see the car I drove up in? Yes, that shit heap. Well, I’m not driving that because I’m trying to save the environment!“.

But there is no point in taking a price query personally. Many clients just don’t know what goes into the process of building a decent website. As mentioned before; if they don’t know, then we need to educate them.

So, instead of getting pissy,  what about responding with something like:

“I really don’t envy your position. It’s very tricky comparing website prices between suppliers as it’s so easy to end up making false comparisons as not all websites are the same.

For instance, my quote includes audience research, branding, keyword research, copy writing, monthly web strategy (etc etc) as I feel  this is what your business needs to achieve it’s goals. If the other company is simply quoting to serve you up a quick website template, without really getting to know your business, then it’s no surprise that they are going to be cheaper. And cheaper is not always better.”

Process

Talking clients through your process allows them to buy into the extra value which you are adding into the project mix. And I do mean “talk through” here (more on that in a future post).

Some people say that a client who questions price is always going to be a problem client; I don’t agree; people have every right to ask what they are getting for their money. You, of course, have every right to charge the amount which you believe your services are worth. And, better still, you have every right to elect to work with them or not.

Next week we’ll jump on to another topic but you can bet your boots that we’ll be returning to price again.

Joel

(*I didn’t really own an hat)

Errrrrrr?

The first time someone asked me this I was completely flummoxed – my mind was turning over thinking “yeah, but surely they know you can’t just give a price?“. But the confidence with which some people ask this question can be disarming; lulling you into thinking that this should be an easy question to answer.  To someone new to running a web design business it can feel like you are somehow wrong or lacking for not being able to answer it.

“Why can’t I answer this simple question? I’m crap at business aren’t I!? I KNEW it! I’ve never been able to haggle! Is that the problem?! I should give up! ARRGGH!! (etc)”

…all because someone asked you the price.

SO, what IS the price?

It’s not unreasonable to be asked how much our services cost. Now,  if the answer is not simple then it’s up to us to frame the answer and to help educate the client. E.g. if I feel it will benefit the client, I’ll explain to them that the question is a little like asking “how much is a house?”; it depends. But bear in mind, the goal here isn’t to make the client feel like an idiot because they don’t know how to engage our services.

And bear in mind that the client is sort of used to talking about prices because of:

• What his/her last website cost
• Or what ‘man down the pub‘ says a website should cost
• Or what Mr Site charges…

So many clients have been conditioned that there is a finite cost to these things.

And that’s fair enough; there IS a finite cost; it’s just that different people add different things into the mix* and, hey nonny nonny, the end result cost is different.

(*And explaining to the client all those different things which go into your mix which make you better than the competition, that’ll be for another article).

Answer the bloody question!

But an answer to this question is quite rightly needed; we have to get used to talking about money; it’s not a dirty word. In fact, if we don’t get the money question right then our business won’t be around long anyway.

In the early days I think I would dance around the topic of money for quite a while as I knew it would be an uncomfortable conversation (for me rather than the client). End result? Time wasted on meetings etc with people who are simply not in your budget range; you can’t let your time get wasted like that; as that is time which should be spent on something more productive.

Cut to the chase

So, with a new potential client, one** of my prime goals is to make sure they are not a tyre kicker; to make sure that their idea of budget and mine exist in the same financial solar system. I’ll do something like this:

“Ok, have you seen my website? There are some previous projects on there as well as example costings“

or more bluntly…

“As a guide, my marketing websites are typically around £5K but that obviously does depend on your particular needs”

…if that doesn’t scare the horses then it is time for a meeting. I like to go for a meeting with (sensible) clients early as exchanges of emails (and indeed the telephone) just isn’t as warm and engaging as a face to face meeting; people buy from people. If you’re like me, you’re quite uncomfortable with the concept of selling but you are comfortable talking about web stuff and how it can benefit people; potential clients pick up on that enthusiasm and knowledge and buy into it.

In an upcoming article I’ll talk you through how I next shape their requirements into a proposal. E.g. I have some packaged services but I tend not to introduce these until face-to-face meetings as they are really a scope guiding tool.

Anyone else have any nuggets with fielding “how much does a website cost” type questions?

Joel

p.s. oh, there is also a school of thought that says if there is not an intake of breath when you tell someone your costs; you’re not charging enough. Just because other people are cheap does not mean you have to be.

(**there are other goals at this stage, i.e. do I want to work with this person? Do I think we are a good mix? Not every client is right for you. )