How to Price Future Projects with Post Costing

A web designer friend of mine said on Facebook and I quote “Some people run a mile when you quote them £25k for a website. Others are just cool with it.”  

He’s a great chap, but this failure to grasp the market place you’re in causes problems for many businesses and given the explosion of web designers who start up their own businesses that’s not surprising in itself, but being a good or frankly fabulous designer doesn’t mean you can run a web design business where other things that are just as critical as being a great designer count.

One of those “other” things of course is the ability to price a project and post cost it too. Indeed even if you’re weak at costing or budgeting, “post costing” on a regular basis will give you a great insight as to how to price your next project.

Post costing or working out how much time and expenses you have actually exhausted on any one given piece of work at a given time is invaluable and I expect the first time you calculate it, will be a bit of a shock too.

“Post costing” a project.

In simple terms to post cost and make it useful and relevant, firstly determine how much you realistically need to earn and for this exercise lets say you need £50,000 a year to pay your bills and live. £50k a year of course equates to about £26 an hour (for 40 hour a week job for 48 weeks) and of course that isn’t a great deal in this day and age, but that’s for another time.

You must make a note of every minute you spend on the project, be that head down programming or (if it is for this project specifically and only) installing a new piece of software, speaking and advising your client, their advisors or staff. When you’ve finished the project and it’s time to invoice the client, establish how many hours you have spent on the job, multiply that time by £26 and compare your required wages with how much you’ve invoiced your client. Of course big jobs become more complex as there can be sub-contract work involved, but in principle you will know many things from this simple exercise including: How much you actually have earned compared with what you hoped and planned to earn, but critically you will have a wealth of information to utilise when you next cost out a job.

Furthermore, when a Client asks you why a project is going to cost so much, you are well informed to answer and can I just add… importantly, don’t allow yourself to be driven down in price. If your price is reasonable, sell the quality of your work, the reliability of your methodology, your proven Client support ethos post project – there will always be someone cheaper, let them work hard for nothing!

I hope I’ve been helpful.

Until next time…

avatar Name: James Briggs
About: James is a Digital Marketing Consultant with over 12 years of design, development, search engine optimisation and project managment experience previously fullfilling a number of senior roles for two of the South's most well established and successful digital marketing agencies before setting up WebSafe Solutions Ltd in 2009. In his own words..."I've planned, designed and developed countless websites and am proud to have helped hundreds of clients to get the very best from their digital marketing campaigns. Some would say I have an unusual blend of knowledge, skill and experience and for my sins I'm an absolute perfectionist!"
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