All these factors go into the price, yet we all have a budget to adhere to. Most of the time it comes down to what we can afford. Many times this means opting out of some of the less essential amenities.  Even if we opt out in the beginning doesn’t mean we can’t potentially add them later. Wanted a pool, but couldn’t afford it upfront? Save up a bit more and you’ll get your pool in a few years. Great things take time.

How does this relate to web design?

I cannot count how many times I receive the “How much does a website cost?” email. Design in any instance doesn’t have a generalized price tag. It’s an investment of experience and time. While the experience factor is tough one to measure and quote, the amount of time, on the other hand, depends on the scale, complexity, features, elements, components, and so on.

Typically, my clients start off by filling out a project worksheet, which helps to gauge the project from the get go appropriately. Questions such as, “Does the redesign need copywriting?”, “Will your site require a CMS?”, “Which ‘social’ feature(s), if any, will be required?”, help to get a general feel for the timing and scale of their specific site.

Check out this site for things to consider when calculating the cost of a website.

Incredible! Happy for everyone! But where is this coming from? Why? Are more people using the web and seeing the true value of it’s earnings and reach finally? Does a majority of the recession reasoning the U.S. deal with the way business is changing and companies are growing online through collaborative consumption? How much of an impact does Dribbble have on the increase of jobs (I’m sure a lot but that doesn’t mean Dribbbble gives them the money to spend on us)? How much of an impact does Apple have on our professional (surely companies have noticed that good design does indeed make a difference)? Why, all of a sudden, have people been investing more in good, strategic design?

These are just a few of the many questions I’ve been asking myself lately. I too have nearly doubled from an already incredible year last year – not to mention we still have five months left in the year. I could answer these questions personally from the stance of my insights and business however I’m just one person giving my take on this dramatic increase. A better assessment would be getting more takes and stories on the matter; so I ask you, Designers, Freelancers, Agencies:

• Have you seen an increase of work this year versus last? Much more? About the same? Less? A tad more? Come on spill the beans.
• Where are your clients coming from? Word of mouth? Dribbble? Google searching? A little this and a little that?
• What do you feel accounts for this increase?
• US folk (or non if you like to also chime in): Why do you think our country is struggling financially, yet people are throwing money into our work?
• If you see an increase of work, what type of work are you seeing the most of (ie: Startups? “Social” UI work? Church sites? etc.)
• Are you marketing more or less?
• Are you turning down more work than you take on?

Would love to make better sense of all this and your help would be appreciated (and also helpful for everyone).

Working without a down payment

Not sure why designers do this, but I receive quite a few emails asking me if I obtain a down payment. The answer is yes and no. Yes, I require money upfront, but no I don’t consider this a down payment. It’s considered a retainer. If you are a busy designer, most likely you are scheduling work well in advance. In order to secure working together for a date that extends beyond a month I require a 25% retainer with an additional 25% upon the start date of the project. Never start work without payment.

Handing over files / launching before final payment is received

I’m certain I will catch a few disagreements on this one, but I make this statement out of sheer confidence: Don’t deliver files until final payment is received. I hear one too many stories about designers finishing work and receiving final payment six months later, or worse, not at all. Plus it only takes one bad experience for you to learn. You don’t walk into the grocery store and say I will pay you in full for the milk later, so why should you run your business any differently.

Attending to the “needed it yesterday” crowd

Great design and successful solutions take time to achieve (sorry clients, we don’t have these incredible ideas stored away for later). Great work evolves and transcends over rigorous thinking, designing, testing, re-thinking and more. Abiding by the “needed the website yesterday” deadline or other unrealistic deadlines often ends in bad business or let down. On a similar note, I often find that when you ask clients why they are in such a rush they aren’t really sure of why. Educate them on your process.

Too many concepts

Everyone likes options, but showing too many only creates more of a problem. Personally, I hate going to a restaurant with a menu of 100 dishes to choose from. Not only does it take me an hour to decide, but it usually results in me picking the worst one. Same goes for design work. Showing less is more.

Not billing by the hour

Here’s another point that I know will keep the comments below busy, but after making the mistake my first year of freelancing I’ve learned that billing by the hours spent makes everyone happier. Although I know this is more difficult having clients understand and conform to these terms, let me explain a bit how I go about this.

First and foremost, let the client know that you bill by the hour at the rate of $XXX.XX (manage expectations for the get-go). Most clients will want to know how much they will spend on the effort in full, so what I typically do is provide them with a starting price based on the scope of the project and what I suggest. I tell them based on this quote I am able to allocate XXX hours into that particular endeavor, however anything over will billed hourly and added onto the final invoice (also I am also able to obtain the initial payment based on this quote).

I also supply my clients with milestones documented in the signed contract — yes, that’s another mistake: not working with a signed contract — this way we are able to stay on schedule and allows the client to see how the process fits into the budget. Which leads me to my next point…

Not obtaining a budget

In the words of “The Million Dollar Man” Ted DiBiase, “Everyone has their price.” Kindly let your clients know that sharing their budget saves a lot of headache and time for the both of you. It allows designers to determine how much time they can allocate to a project and enables us to advise the client on how best to use their money.

Doing what you do best

I’m not going to debate if designers should code and if coders should design, but both sides should have a solid understanding of the others medium at the least. I will however stand by the statement that you should stick to what you do best. If you’re a designer that knows how to code, but doesn’t enjoy it, then why do it? Give yourself the chance to do what you enjoy by bringing in a developer that has the same passion for what he enjoys. Trust me, the work in its entirety will show for it and you will give yourself to grow more, not to mention live a happier life and lead a happier business.

Good design and good business is about teaching

If you wanted to make things look pretty, maybe you should have been a painter. Good design and even better designers teach their clients and share your experiences with others. Educating clients add more value than a rounded corner button. Transparency goes a hell of a long way in our industry. Actually any industry for that matter (businesses take note). Teaching allows you to formulate your own opinion and point of view, which helps to become a better “salesman” (I apologize now for using that word),  get more work and demonstrating confidence in your decisions.

Understanding design is a craft

In the words of Mark Boulton, “Web design is a craft. And like other crafts – letterpress printing or book-binding – they’re not generally taught in colleges or universities.” Being in this fast moving industry means you need to constantly be on top of it and both want and need to continue maturing to prosper. For those that don’t know this already, but working in the web right now is the place to be and it’s even better as a designer with the amount of work that is out there currently. Hone your skills and pay the bills folks. Don’t forget to have fun while doing it though.

Also, this will be the first edition of my reflections, starting with the ‘good and improved upon’ from 2009–2010. Will be following up with the ‘Need to Improve’ list in coming weeks.

The improved (at least I think so):

1. Hire and worked with an accountant. Hiring an accountant has relieved a lot of pressure, especially when it comes down to tax season in a month or so. I report to him every quarter with my estimates and come the end of the year he handles the rest. I’m a believer and doing what you do best – money, taxes, and dealing with Uncle Sam is not one of them for me.
2. Worked with more passionate clients. I try not to think of any client as a “bad” client, but when you get a passionate client you will know it. These are typically people that already have interest in our field (even though they are not designers), well-researched, open-minded, and–being that I work mostly on the web–love seeing the web and technology move forward. While it could be a complete coincidence of why I’ve worked with these types of clients, I like to think I owe a lot of it to my involvement in the design community with speaking, conference attending, writing and staying extremely current and understanding where the web is heading. Not only will it help you grow, learn, make great connections, but will help your work reach new heights and eyeballs. Simply, passionate clients want to work with passionate designers.
3. Paid attention to the details. I’ve applied this mantra to many instances of my work and my business. For example, I’ve spend more time educating clients this year and also paid closer attention to the tiny details in my work that can take a good design to great – which also brings up my next point…
4. Growth. I honestly am not sure if I will ever be fully happy with my work… and I’m alright with that in many ways. It helps me to grow. If you can look back on your work from the previous year and see improvement then you are doing something right. Since graduating college I’ve always made it a point to learn and keep learning as much as possible. I owe this to many great books, reading blogs / staying current, self-reflection, peer-reflection, and endless hours of design-thinking. Surrounding yourself and your thoughts into design as much as possible is a sure-shot outcome to grow.
5. Kept organized. Keeping extremely organized will help save many (and I mean many) hours of which you can focus on more important things in your business. Here are a few tips on how I stay organized and efficient this year.
6. Kept my head (and work) in the clouds. I’ve been using Dropbox for a few years now and in the past year I’ve finally upgraded to the 100GB plan, moved all my work files to the cloud, and work between my at home iMac and Macbook Pro when I work from various remote locations. No more remembering to sync before leaving the house; no more “which version is the latest;” Basically no more fuss and couldn’t imagine running my business without it.
7. Added a Notebook. As much as I love reading and learning, it appears that many of you do as well. The Notebook section added in May’s redesign seems to be a huge hit and really excited that many of you have embraced it with open arms. I try my best to only post the highest, quality resources, thoughts and information and hope you enjoy it for years to come. It also helped me stay current with the industry and provoke more discussion and thoughts in my own head. Traffic to this site has also increased and I thank all of you for that.
8. Shortened my emails. I can’t tell you how much time I spend in the past 2+ years of business answering emails. I’ve learned this year to write as little as possible and get directly to the point. Saved many hours this year.
9. Focus. At the end of 2009, my goal was to drastically improve one area that I felt needed it the most, which for me was typography. I focused a lot of attention on learning more about the history of type design and typefaces and also the craft of good typography. Starting to think about a new focus for 2011.
10. Attentive beyond the computer screen. Inspiration often does not come when you need it so I’ve found myself documenting the world around me more this year. My iPhone has been extremely handy in taking quick notes or snapping a quick photo of a color palette I enjoyed as I passed by. Collecting inspiration before and needing it later often ends in better results.

What are some things you’ve improved on from last year?

On budgets and advising

With the year coming to an end in three months, it’s that time when any business should be reflecting on the good, bad and mediocre of past months in effort to change for the good the following year. Lately I’ve been reflecting my pricing methods and communication between myself and clients and clients and myself.

The majority of my clients I’ve never met in person (40% of my conversations never extend beyond email; mostly those of overseas clients), so I make it a point to build as much trust as possible given the circumstances – one is sharing my thoughts and processes on this blog. However the dreaded question of ‘pricing’ always tend to weaken the knees of everyone. Again, in a trust building effort I try to explain, in much detail, on what their project needs to accomplish, how we are going to do it and whats needed to accomplish it – one of which is a typical project”starting” price.

I also break the ice first by asking their budget. Before letting them respond, I quickly explain that sharing their budget allows myself to determine how much time I’m able to invest (since my estimates are based on my hourly rate and a projected amount of time). At the very least, I explain that determining their budget allows advising on how to best use their budget to accomplish their needs and wants (don’t confuse the two). For example, there are many instances when a client has a slightly lower budget than necessary to pave a truly successful outcome, but knocking off a few “wanted” (a.k.a. not necessary for launch but a cool feature) parts of their website to implement at a later time when they have additional investments is more beneficial than simply slapping something together.

Secrets, secrets, are no fun…

The reason I explain the above to all my clients before letting them interject with an actual budget is to help them understand how I work so they understand that I’m just not trying to get the highest price out of them. The more time I can invest the better the outcome. The more time I can research, prepare, try, scrap, try again, etc. Simple and fair, no? Still many conversations about budgets proceed like this:

Client: *pause* “Ummm… *pause* We don’t have a budget.” *awkward silence that awaits my next move*

Me: “Based on my explanation (above) on how I charge and my hourly rate of $XXX.XX, a starting price for a project you outlined will be $X,XXX.XX. Obviously the goals and outline of the project can change throughout the the course of your project so this is only an estimate, but for the most part they are quite accurate. This prevents the project from getting out of hand and beyond the scope of the contract.”

Client: *pause* “Ummm, well… that is substantially higher than we would like to spend.”

Ok, let’s stop there. Does the above situation sound familiar?

Within the first few minutes of contact — in my effort to be as open and detailed on how I work as possible — the client counteracted by lying about not having a budget to clearly having a budget. How does the relationship change? Put yourself in their shoes. Would you want to work for someone that lies and keeps secrets? Setting the tone and the relationship from the get-go is extremely important – not only from a client-designer standpoint but from a project standpoint. Honest work is good work and this goes both ways.

Also check out the other A List Apart article these week, Kick Ass Kickoff Meetings by Happy Cog’s Kevin Hoffman. Nice to see two articles this week from a client interaction stance.

Make no mistake about it; running an independent business, no matter what field you are in, is extremely time consuming, exhausting and requires a lot of motivation and dedication. It’s not for everyone. Running your own business means that there are more unpaid and non-billable items that you perform on a daily basis. Emailing, answering phone calls, marketing, networking… these are all, for the most part, non-paid facets of what we do. If you are an in-house designer, responding to emails, answering phone calls, and marketing, among other things, are payable because you are on the clock. You get paid for the time you are under the roof of your office. The self-employeed unfortunately do not. This means that we need to compensate for the time we do not get paid. Freelance means that we do more unpaid “clock” work; not that we do more paid work for less money.

This might sound familiar to some most of you: I received an email from a potential client inquiring a new website. After a few emails back and forth, the talk of money came into the equation, only to have the client question why my rates where so high as “they too were freelancers or small businesses.” They also asked if I’d consider slashing my rate by two-thirds. How about this one: I received emails looking for a $1,000 website because large firms I’ve contacted charge in the six-figures.

There are reasons large companies charge $100,000 for a website and it’s not only based on credibility and size of the website. They have more employees to pay and a much larger overhead to cover. The price for this is taken into consideration. It’s not just design firms that do this. It’s all businesses. How much do you think your local grocery store buys a box of Cheerios for? Having worked for a TGI Friday’s a while back I remember seeing how much they get a rack of ribs for in comparison to how much they sell to the consumer. The margin is so unbelievable that you don’t even want to know. The Apple iPad costs $270 to make. Does this stop you from buying one for $499? Most likely not. Why? Because there is the need factor and there is the trust factor. Need not in the way that if we don’t have one we will die, but need as in we want that one instead of another tablet computer. Why do we want that one? Because we trust it and the company behind it. The same can be said for design services. Sure you can go out and get a $500 website done up, but I guarantee you will eventually come back to getting what you want from someone you trust, and between me and you, if someone is designing and building a website for $500 I’d be extremely vigilant making that decision.

I receive a lot of emails from designers just starting off asking “how do you charge?” This is a tough one and I can tell you with time it only gets better for understanding what you should be charging. Now I’m not saying to go out and rip off your clients, but when you are pricing your services take into account all of these extra “non-billable” things. A good ten hours of my week (at least) is dedicated to answering emails. Do I get paid for this? No. However, I do need to make up for all of these extra hours someway. Either that or I’d find myself spending more than I make per say. Also, consider taxes. Around 40% of my income goes to good ol’ Uncle Sam. A thousand dollar project pretty much goes right down to $600 bucks. Freelance is a business and it should be handled no different than any other. Sure, we can charge less than the large firm because we have lower overhead costs. That’s one benefit of working with an independent designer, but lets not take advantage of the fact that we are working alone. Quality design and development comes with time. Each project requires a unique solution and without taking the time to think, plan, structure, design, develop and so on, will only return bad (or less than par) results.

I understand that it is often difficult to budget a company, especially if its just getting its feet wet, however building a larger budget and coming back to a project later is a much smarter investment than getting something slapped together for the sake of needing it. Investing a few extra hundred or thousand dollars (or whatever the cost difference might be) to have it done to the best of its potential will kick back a greater outcome all together and all sides will be much happier in the end.