This web design pricing calculator is for web designers who want to know how much their work is worth when pricing their projects. It will tell you if the project is a good financial deal for both you and your client and if so, will give you a price range for your work taking into account your costs as well as the projected value for your client.
There are three main goals behind this calculator:
- Make sure you are covering your costs and making a profit
- Make sure your client is seeing a positive return on their investment
- Make sure you are thinking about both the initial build as well as your monthly retainer (recurring revenue).
How It Works
This is not intended to be a comprehensive financial model for your business. It's a quick way to get clarity on your pricing. As such, there are a bunch of heavy assumptions made in the process.
Calculating The Cost Of Building A Website
The first section collects the numbers to figure out what your costs are to build and deploy your client's website including baking your profit into the mix.
This is the raw amount of money you'd like to make per hour while working on this project.
Estimated Pre-Launch Hours
How many hours do you think it will take to do everything you need to do BEFORE launching the website? Do not pad the hours. Make this your absolute best, honest estimate for how much time you believe you'll need to spend working on this project.
This should encompass ALL of your time including:
- Site design
- Graphic design
- Client meetings
- Client communications (emails, phone calls, etc.) not during official meetings
- Writing documentation
- Provisioning hosting
- Setting up backups and security
The pricing calculator will pad your hours for you. For projects totaling fewer than 40 estimated pre-launch hours, your hours will be padded by 50%. Projects over 40 hours will be padded by 33%. There are always unexpected things that pop up during a project. Maybe the client has a quick new idea. Maybe something weird goes wrong trying to provision the live hosting account. Stuff happens. You have to account for scope creep. You want to be in a position to be able to absorb those issues without having to renegotiate the project price and without having to just eat it.
In my experience over the last 18 years of managing a very wide variety of web and software development projects, I've found that scope creep, as a percentage of the project, is significantly greater in smaller projects than in larger ones. This is somewhat counterintuitive because it's tempting to think that if the project is small, so too will be the scope creep. But the problem is that if you budget 10 hours for an entire project even a small unexpected problem that might only take 2.5 hours to deal with is 25% of the whole project. That's why we pad the hours for small projects at a higher percentage than for larger projects.
Outsourced Development Costs
These costs are what you pay to other people you bring in to help you with the project. For example, maybe you hire someone to help you write copy, or design a logo. Or maybe you need to hire a professional photographer. Or, maybe you design the website in Photoshop but then outsource the development of a custom WordPress theme based on your Photoshop design. This is where you enter the sum total of all the things you need to outsource to get this website launched.
Cost of Materials
In addition to hiring other people, you might need to buy certain things for the project. For example, you might be stock photography, a software license for the client, a WordPress theme, or WordPress plugins. These are the one-time costs you incur to get the website launched.
Calculating The Costs For Your Monthly Retainer
The primary difference between low-budget web design and high-ticket consulting is results. Client's will not get results from one-and-done projects by themselves. That means the client is either going to need to go hire someone else to help them get results or you need to offer a monthly retainer so you can be there to get results for them. Of course, my recommendation is that you stick with your client. This is better for you because you get consistent monthly recurring revenue. It's also better for your clients because they are getting the outcomes they really need.
Post-Launch Hours Per Month
This is the number of hours per month you will devote to getting results with the tools you just set up for your client AFTER you launch their website. This will include hosting and WordPress maintenance, backups, etc. But the heart of it will be business development and marketing. My recommendation is to never go below 10 hours per month. If you offer a retainer that does not allow you to spend at least 2-3 hours per week helping your client then you have created a situation where you don't have enough time to do anything that will generate results. If your client isn't seeing results then they'll cancel the retainer and everyone will have a bad experience. So, don't go below 10 hours per month.
Monthly Cost of Tools
This is the cost of the tools you need to use to fulfill your monthly retainer. For example, maybe you're using Buffer to schedule social media posts. Or you've got a MailerLite account for email marketing.
Monthly Cost of Outsourced Resources
This is the sum of the monthly cost for outsourcing services you provide in your retainer. For example, this could be white labeled SEO services, people you pay to edit/produce the audio/video for a podcast, people you pay to manage social media, etc.
Calculating The Value To The Client
Clients Per Month
How many clients/customers will your client get each month through your solution? We look at this in terms of clients/customers rather than product/service sales because that helps us get a big-picture view of the overall value you are adding to your client's business. Admittedly, this is a very rough number because not all clients provide the same value. Some clients buy expensive things while others go for low-ticket items, some clients engage in multiple transactions while other clients just buy one thing, etc. But this isn't a financial business model. It's a quick pricing calculator. So, to keep this in the scope of just being a web design pricing calculator, we're lumping all those factors together just to get a rough idea of the client's return on investment.
Lifetime Value of Client
This is the total value to your client when they onboard a new client. This is another oversimplified component of this calculator. But, it's important to get an idea for what your clients can expect in terms of a return on their investment.
For example, suppose you're working with a photographer and she does family portraits, senior pictures, and weddings. Weddings might be $5,000 – $10,000 whereas a quick family portrait session might just be $500. So, just try to average all of that together and figure out what the average value of a new client might be. In this example, maybe you can get her one wedding per month, and two family portrait sessions per week. That would add up to one $5,000 wedding plus eight $500 sessions ($4,000). That's a monthly total of $9,000 from nine clients. So, the average value of a client would be $9,000/9 = $1,000. Also, keep in mind that a client may come back for family pictures every year. In other words, it's not just a one-time transaction. Maybe the average family portrait client ends up getting pictures for 5 years. So, that would make a family portrait client worth $2,500 ($500 x 5). Try to factor all of that in when you're specifying the lifetime value of the client. Again, it's just a rough estimate so you can get a price range for your project but don't sell yourself short by not considering the value of repeat clients.
Additional Revenue Streams
In addition to helping your client increase sales of existing products and services, are there any additional revenue streams you can help them create? Can you take any of their off-line products and put them online? Can you help them develop new products or package up existing products in new ways? Adding new revenue streams is a serious factor to consider when calculating the financial impact you can generate for your client.
Reduced Costs Per Month
Another way to “make” money for your client is to help them cut down expenses and streamline their workflow. How can you help your client save money because they are working with you? Maybe they don't have to pay a separate person for social media management or SEO. Maybe they don't have to spend as much time on their lead generation because you're doing it now. If your client was spending 10 hours per month trying to blog or send their own email newsletters and they don't have to do that anymore, how much is that worth?
Good vs. Bad Projects
Depending on how all the numbers shake out, the pricing calculator will tell you if the initial build and the retainer are “good” or “bad” investments.
A “good” project is one where everybody wins and both you and the client end up profitable. A “bad” project is one where your cost to fulfill the project is greater than the value generated for your client.
This pricing calculator assumes that your client should at least double their investment over the course of one year for it to be a “good” investment. For example, if you charge the client $5,000 for the initial build and $10,000 (around $850/mo) for the retainer ($15,000 total over the year) then hopefully the client will generate at least $30,000 of business through your solution.
The pricing calculator will look at both your initial build and your retainer separately and will give you pricing targets to make sure you have a solid offer in place that will be profitable for both you and your client.
Give it a try and see what you think.