\u201cThere\u2019s no such thing as a market rate. Only you can decide what you\u2019re worth.\u201d<\/p><\/blockquote>\n
Or maybe you don’t know how to price your services and decide that “bartering” is a great way to start your business\u2026<\/p>\n
\u201cWhen I started this (WordPress) business, I exchanged a website for a 6\u2032 fence around my property. The value of the fence was $3,000, so that\u2019s what I got in exchange for their website.\u201d – Phil, WPMU DEV Member<\/strong><\/p><\/blockquote>\n
Yes, it\u2019s all true, but it doesn\u2019t generally apply to absolute beginner or intermediate-level freelancers or web developers running their own business.<\/p>\n
Of course, if you have a shiny portfolio, or if your calendar is booked out for months in advance (because you\u2019re that good) then sure, you don\u2019t have to think about the going rates or what other people are charging.<\/p>\n
The bottom line is, no one wants to work for peanuts. There’s a lot to consider when constructing your pricing model.<\/p>\n
Fortunately, we have access to a\u00a050k+ member community of web developers and we have gathered the information presented in this article through surveys and discussions.<\/p>\n
Rather than talking about specific pricing and what to charge (which we cover in other articles – see links at the end of this article), in this article, we’ll go deep into how to set up pricing for your services so you can apply these ideas and come up with a pricing model that works for your business.<\/p>\n
And so in this post:<\/p>\n
\n
- We\u2019ll show you a surefire way to price your projects so you\u2019re never<\/strong> underpaid.<\/li>\n
- If you aren\u2019t sure what your hourly rate should be, we’ll look at feedback we got from our web developer members, as well as looking at crowdsourced data and the going rates on popular freelance marketplaces.<\/li>\n
- We\u2019ll also see some tools to help you validate your project estimate and ensure that it\u2019s not way off the mark.<\/li>\n
- And in the end, we\u2019ll see how you can meet your annual monetary targets using some cool freelance rate calculators.<\/li>\n<\/ul>\n
Note: This guide is not<\/strong> for you if you\u2019ve reached a point in your career where you can charge what you want. This guide is for you if you’re a freelance web developer or starting your own web development business.<\/em><\/p>\n
Continue reading, or jump ahead using these links:<\/strong><\/p>\n
\n
- Fixed vs Adjustable Pricing<\/a><\/li>\n
- Hourly Rates<\/a><\/li>\n
- Beyond the Hourly Vs. the Flat Fee Debate: Bottom-Up Estimating<\/a><\/li>\n
- Clueless About Your Fair Hourly Rate?<\/a><\/li>\n
- Does Bottom-up Estimating Look like an Hourly Pricing Model to You?<\/a><\/li>\n
- How to Confirm That You Aren\u2019t Underquoting<\/a><\/li>\n
- Calculating Your Pricing – What The Experts Say<\/a><\/li>\n
- Quoting Software<\/a><\/li>\n
- Some Pricing Questions That You Might Still Have<\/a><\/li>\n
- Choosing Pricing Based on Your Income Goals<\/a><\/li>\n
- Raising Your Rates<\/a><\/li>\n<\/ul>\n
Fixed vs Adjustable Pricing<\/h2>\n
We recently approached our web developer audience and asked the question: How do you currently charge your web development clients?<\/em><\/p>\n
It\u2019s not cut and dry. Responses revealed some interesting results and patterns.<\/p>\n
Fixed vs. adjustable?\u00a0Is it best to have a set price, so you\u2019ll know what you\u2019ll make? Or, do you adjust accordingly \u2013 making the end payment vary?<\/p>\n
Here are some insights that will help clear things up\u2026<\/p>\n
First, a positive factor of a fixed price is it\u2019s straightforward for you and the client to understand.<\/p>\n
There won\u2019t be any guesses on how much the project will cost at the end of the day. Whereas an adjustable price \u2013 or hourly rate \u2013 may have sticker shock.<\/p>\n
Or the opposite of that might be severely undercharging.<\/p>\n
\u201cIf you break down exactly what you do and how much time you spend on it, you will probably realize that you really do spend a lot of time on long-term clients, for which you must be compensated. If not, you\u2019re doomed to that joy of the initial sale and payment, a nice dinner, and rent money, followed by the remorse of having demanding clients and overdue bills.\u201d WPMU DEV Member \u2013 Tony G.<\/strong><\/p><\/blockquote>\n
A scenario of a fixed amount would be if a developer charged a minimum of $740 for a blog-based website and $1000 for an eCommerce.<\/p>\n
However, the client goes beyond the fixed amount, so the developer charges for add-ons (e.g., Google Search Console, maintenance, security, etc.).<\/p>\n
Or several members mentioned it depends on the complexity of the project. It could range from $1,000 to $10,000. This is where you get into quoting (which we\u2019ll get into next).<\/p>\n
Whether you go with a fixed or adjustable price, make sure it makes financial sense, and you\u2019re comfortable with your decision.<\/p>\n
After all, there\u2019s nothing worse than doing a development project when you feel like you\u2019re being severely underpaid.<\/p>\n
This takes us to another pricing structure, which is\u2026<\/p>\n
Hourly Rates<\/h2>\n
Hourly Rates ensure you\u2019re getting paid for any time you put into your work. This includes everything from correspondence to actual work on a WordPress site.<\/p>\n
A benefit is that you’ll capitalize on your time if a project takes longer than expected. That being said, a disadvantage of an hourly rate is if a task takes less time, you won\u2019t earn as much as you originally anticipated.<\/p>\n
Here are a few thoughts on this\u2026<\/p>\n
\u201cFor most projects, I do per-project, value-based pricing. I only use hourly for small things or ongoing maintenance work. Usually, it just ends up being what I feel makes sense \u2013 thinking about things like what\u2019s the value, how much I need to be paid in order to care enough about it, how much are they able to afford, how much am I willing to simplify if they can\u2019t afford much, will it contribute anything to my portfolio, do they even need what I offer, would it lead to more work, would I like working with them and will it be an enjoyable project, are there enough quality assets (photography, good copy, a usable logo, etc) available or am I going to have to lecture them about why we need better assets, what tools will I be able to use to build it and how much custom coding will I need to do, etc., etc. Eventually, I just pull a number out of thin air that I feel makes sense. Obviously, I know it\u2019s not super scientific, but if we both feel the price is manageable and fair, then it doesn\u2019t matter how much it is.\u201d<\/em>\u00a0WPMU DEV Member \u2013 Greg<\/strong><\/p>\n
\u201cSetting a price up front is great but be careful with this line of thinking: if your client asks you to justify your costs and you tell them your hourly wage is $20 because that\u2019s what your up-front billing works out to, that\u2019s all you\u2019ll ever be able to charge them.\u201d<\/em> WPMU DEV Member \u2013 Phil<\/strong><\/p>\n
You can also include several services at once as a bundle. Packages are a great way to charge a higher rate and not chase after additional add-ons down the road.<\/p>\n
Some great examples of bundled packages can be found in our additional services article<\/a>.<\/p>\n
There\u2019s a way to incorporate fixed, variable, and hourly rates into the website of your service. The main point is it\u2019s clear to your client what they\u2019re looking for when it comes to costs.<\/p>\n
Beyond the Hourly Vs. the Flat Fee Debate: Bottom-Up Estimating<\/h2>\n
Next let’s look at a helpful project estimating technique that applies seamlessly to all kinds of WordPress projects – “bottom-up estimating.”<\/p>\n
What is it exactly?<\/p>\n
Dick Billows from 4 pm explains:<\/p>\n
“When the estimates of the amount of work, duration and cost are set at the task level, you can aggregate them upward into estimates of higher-level deliverables and the project as a whole.”<\/i><\/p><\/blockquote>\n
Basically, in bottom-up estimating, you list out all the tasks you expect to do as part of the project delivery and estimate individually for each of these tasks.<\/p>\n
Next, you roll up these numbers to get the final project quote.<\/p>\n
For example, for a WordPress site development project, the typical stages include:<\/p>\n
\n
- Planning<\/strong><\/li>\n
- Implementation<\/strong><\/li>\n
- Testing<\/strong><\/li>\n
- Review<\/strong><\/li>\n
- Client training<\/strong><\/li>\n
- Content upload<\/strong><\/li>\n
- Soft launch (and launch)<\/strong><\/li>\n
- Post-launch support and maintenance<\/strong><\/li>\n<\/ul>\n
If we had to apply the bottom-up estimating technique to this, we\u2019d further break down these stages into the actual tasks for each.<\/p>\n
At the task level, here\u2019s what this project could look like:<\/p>\n
Planning<\/strong><\/p>\n
\n
- Plan IA<\/li>\n
- Sketch out a sitemap<\/li>\n
- Determine the technology stack<\/li>\n
- Understand the functionality to custom code<\/li>\n
- Understand the functionality to prove via plugins (with or without the customization)<\/li>\n<\/ul>\n
Implementation<\/strong><\/p>\n
\n
- Build the website<\/li>\n
- Install and fine-tune plugins<\/li>\n<\/ul>\n
Testing<\/strong><\/p>\n
\n
- Check overall functionality<\/li>\n
- Check for broken links<\/li>\n
- Check sitemap<\/li>\n
- Check for access<\/li>\n
- Check performance metrics<\/li>\n<\/ul>\n
Review<\/strong><\/p>\n
\n
- Showing the site to the client<\/a><\/li>\n
- Do one round of revision<\/li>\n
- Submit for re-review<\/li>\n<\/ul>\n
Client Training<\/strong><\/p>\n
\n
- Show the client the way around the site<\/li>\n
- Explain updates and ways of uploading content<\/li>\n<\/ul>\n
And so on.<\/p>\n
Once you’ve broken down a project like this into individual tasks, the estimating begins.<\/p>\n
And because this estimation technique takes into account every task of the project, it ensures that you’ve paid for all the work you do. Simple.<\/p>\n
To apply the bottom-up estimating technique to calculate your project quotes, follow this simple three-step process:<\/p>\n
Step #1: List each task you\u2019ll have to perform as part of the project<\/h3>\n
Don\u2019t skip even the smallest of all tasks. You\u2019ll be surprised to realize how much work you actually <\/i>put in.<\/p>\n
Step #2: Determine how long each of these tasks will take<\/h3>\n
Don\u2019t club any of the tasks together; add a time tag to each.<\/p>\n
As you can tell, determining the right amount of time for the different tasks is critical to making this technique succeeds, which means that this technique will only work if you know how long you take to do the different steps.<\/p>\n
But what if you don\u2019t know how much time you take for the different project tasks?<\/strong><\/p>\n
Well, if this is the case, all you can do is guess the time requirements for all the tasks. And create an estimate based on the guesses.<\/p>\n
When you make such “guesstimates,” it\u2019s possible to be over-ambitious. You may think that you\u2019ll choose the technology stack in five hours, but you might end up taking a full day.<\/p>\n
So don\u2019t go with your first estimate. Consider these three things:<\/p>\n
\n
- The best-case estimate (a)<\/strong><\/li>\n
- The most likely estimate (m)<\/strong><\/li>\n
- The worst-case estimate (b)<\/strong><\/li>\n<\/ol>\n
And your final estimate (E) becomes: (a + m + b) \/ 3.<\/p>\n
(This is a type of three-point estimation<\/a>.)<\/p>\n
Remember: tasks will always<\/em> take longer than you think!<\/p>\n
Also, this whole guesstimation process will work for you for now, but if you want to give estimates that never fail, you need to know how much work you can get done in a period of time.<\/p>\n
To find this out, use a time tracking tool. Toggl <\/a> is a great option to consider.<\/p>\n
It has apps for all major platforms, so you can track time even when you\u2019re working locally. You can also set Toggl to launch when you start your laptop.<\/p>\n
This way, you won\u2019t forget to log your work hours. Also, with unlimited clients and projects, Toggl’s free plan will cover you fully.<\/p>\n
Step #3 : Add up all the time estimates and multiply with your hourly rate<\/h3>\n
The result is your project estimate. Add to this estimate the time that goes into communicating and collaborating with your client \u2013 don\u2019t discount this time because it can add up fast if it\u2019s a big project that will involve a lot of discussions.<\/p>\n
Some freelancers also recommend padding such an estimate out with a few extra hours, just in case.<\/p>\n
So if you can only make nearly accurate time calculations and set the right hourly rate, the bottom-up pricing technique will never leave you underpaid.<\/p>\n
Clueless About Your Fair Hourly Rate?<\/h2>\n
If you have no idea of what a fair rate will be with the skills and experience you have, try using Bonsai\u2019s web developer hourly rate calculator<\/a>.<\/p>\n
Bonsai allows you to compare freelance rates, taking into consideration your locations and years of experience.<\/figcaption><\/figure>\n The Bonsai rate calculator uses insights from more than 30,000 contracts to offer suggestive hourly rates for developers based on their roles, skills, experience, <\/i>and location<\/i>.<\/p>\n
Bonsai states:<\/p>\n
“Many factors go into pricing, and this [the rate calculator] should be one of several you use. It can be helpful as a directional indicator: are you above, below, or within the average? The data can also be used to justify your rates to clients.”<\/p><\/blockquote>\n
Keep in mind\u00a0the calculator is just a tool \u2013 you<\/em> will be the best person to determine what a fair rate is for your services.<\/p>\n
Does Bottom-up Estimating Look like an Hourly Pricing Model to You?<\/h2>\n
Maybe you\u2019ll argue that the pricing technique we saw above is, in fact, an hourly pricing module. And, of course, you\u2019re not wrong or alone in thinking so.<\/p>\n
A few WordPress developers don\u2019t like this method of estimating. They recommend offering a flat rate for a project based on factors like:<\/p>\n
\n
- The ROI the client will get from hiring your services – For instance, how hiring you will get the client an additional $XX each month).<\/li>\n
- The market or niche of the client – For example, “adjusting” the cost based on the client by considering if the client is a solopreneur or a C-level executive in a top company. Essentially, the same service will be quoted at two prices.<\/li>\n
- Availability – This means charging higher if you\u2019re booked out, occasionally discounting if in need of work).<\/li>\n<\/ul>\n
All this stuff is great, but as I mentioned earlier in this article it hardly applies to beginner or intermediate freelancers \u2014 especially those who haven\u2019t yet developed the knack <\/i> of pricing.<\/p>\n
How to Confirm That You Aren\u2019t Underquoting<\/h2>\n
The following tool will help somewhat validate your project quote. It’s not 100% accurate, but this tool should indicate if you\u2019re grossly undercharging.<\/p>\n
Project Quote Calculator from WebPageFX<\/h3>\n
This handy calculator will help you come up with estimates for website projects based on inputs you can adjust.<\/figcaption><\/figure>\n The Project Quote Calculator<\/a> suggests rates based on a site\u2019s specifications like the number of pages, features like responsiveness, functionality and more.<\/p>\n
If you offer additional services like design, development, copywriting, and SEO packages<\/a>, this tool will give you a reasonable idea of what to charge for your different packages.<\/p>\n
Calculating Your Pricing – What The Experts Say<\/h2>\n
When calculating prices to charge clients, there\u2019s a lot to contemplate. Everything from your time, complexities, tools, and more comes into play.<\/p>\n
\u201cIf the project doesn\u2019t call for any special skills, I\u2019ll bid it at $50 per hour. But if it will require 3d or video, or some kind of custom javascript, then I\u2019ll charge between $75 and $100 per hour. I also consider who the client is, what they can afford, and how annoying they might be to deal with.”\u00a0WPMU DEV Member \u2013 Kahnfusion<\/strong><\/p><\/blockquote>\n
Any client with no clue about the timeline or complexities might be anxious about hiring a developer hourly. After all, as far as they know, a project could take thousands of hours and be way beyond their budget.<\/p>\n
\u201cHere\u2019s how I sell my projects: I am quoting your website project at $6,000. I quote my projects in lump sum costs because I\u2019m meticulous and regularly spend over 100 hours when building a website, making sure all details are accounted for. At my hourly rate of $100, it just wouldn\u2019t be very fair to you to charge by the hour, which is why I\u2019m quoting a lump sum cost for the website. Any additional extras or customization you\u2019d like to do afterward will be charged hourly. This way, I just told them I am potentially going to spend 100 hours on their project, and at an hourly rate of $100 that\u2019s a $10,000 value they\u2019re getting for a lump sum of $6,000. Hopefully, they see the value in this, and it also prepares them to pay $100\/hour for extras going forward.\u201d\u00a0WPMU DEV Member \u2013 Phil<\/strong><\/p><\/blockquote>\n
A good rule of thumb is to get a good estimation of your client’s needs. Get as many details as possible before starting the project. Narrow down your quote and include a general time estimate on your website.<\/p>\n
Here\u2019s an excellent example from Upwork<\/a>:<\/p>\n
\n\nAs you can see, a lot can be included to ensure you give your client a good quote.<\/figcaption><\/figure>\n<\/div>\n<\/div>\n Our members mentioned a handful of things to consider when quoting.<\/p>\n
\n
- Be conscious of the costs on your end: internet, phone bill, hosting, domain, WPMU DEV, subscriptions, outsourcing, and person-hours.<\/li>\n
- Quote a bit lower ($5-8K instead of $18.5K) so your agency can make more money on going from upgrades, maintenance, etc.<\/li>\n
- Compare the cost of a basic install (WordPress, plugins, etc) to a new business site with a completely custom template and integrated features.<\/li>\n
- Set the price for the project up front by calculating the hours it will take.<\/li>\n
- Base a lot of the quotes on the size of the company. Larger companies get charged more.<\/li>\n
- Consider the number of pages or number of products for eCommerce websites<\/li>\n<\/ul>\n
Once you have a nice idea about the scope of a project, it\u2019s just a matter of adding up the numbers and figuring out how much to quote.<\/p>\n
One of our members, Ed, from GETSET2G<\/a>, put together an excellent spreadsheet<\/a> for calculating costs on Google Sheets. You can change currencies, add information, and more.<\/p>\n
A snippet of a Google Sheets spreadsheet with calculations for project costs.<\/figcaption><\/figure>\n Quickly and easily develop a spreadsheet \u2013 or similar method using Google Docs, Microsoft Excel, or another spreadsheet source. It\u2019s a very simplistic way to accurately figure out a quote.<\/p>\n
But, let\u2019s say you want to jazz things up a bit. Luckily, there\u2019s\u2026<\/p>\n
Quoting Software<\/h2>\n
Beyond spreadsheets, there is software that can help with quotes. Some companies can help organize and implement quotes for you and your clients.<\/p>\n
Of course, we have our Clients and Billing tool. It makes it easy to set up and bill a client, then have them pay online. We\u2019ve talked about it in previous articles, such as How To Get the Most Out of Client Billing<\/a>.<\/p>\n
That being said, these companies are a bit different where they focus on quotes and billing. For example, they help focus on the actual presentation of the quote and the \u201cwow\u201d factor.<\/p>\n
Here\u2019s a quick rundown of three quoting services. (And please note, these companies are in no way affiliated with WPMU DEV. They have solid reputations, established, and we feel they make for good options.)<\/p>\n
Scoro<\/h3>\n
Scoro is worth checking out for your quoting template needs.<\/figcaption><\/figure>\n Scoro<\/a> is unique in several ways. They have predesigned templates for quotes, where you can quickly turn that quote into a purchase order, contract, or invoice.<\/p>\n
There are a lot of details you can include in your quote.<\/figcaption><\/figure>\n \n<\/div>\n<\/div>\nOther aspects include tracking results in real-time, partial payment options, and organizing by teams.<\/p>\n
There is no live demo on their website, but you can quickly request a demo<\/a> with your email address.<\/p>\n
Qwilr<\/h3>\n
Qwilr is here to impress.<\/figcaption><\/figure>\n Qwilr<\/a> is all about impressing your potential client with their proposal templates. They have options for embedded images, videos, websites, and more to show your potential client(s).<\/p>\n
\n\nQwilr’s templates let you easily create professional-looking quotes and proposals.<\/figcaption><\/figure>\n<\/div>\n<\/div>\n Plus, they have interactive quotes. This allows you to show your client what costs would be when additional services or projects are added.<\/p>\n
Check out their templates<\/a> to see all the details and professionalism you can include in your proposal to make your bid stand out.<\/p>\n
Nusii<\/h3>\n
Lastly, Nusii has an impressive layout that can “wow” your potential clients.<\/figcaption><\/figure>\n Nusii<\/a> is another option that can make you stand out from the competition. It has templates that can be modified in a few clicks, proposal notifications, and a save & insert option for your content, so you can eliminate rewriting.<\/p>\n
Nusii immediately notifies you if a client selects these options and agrees to your proposal.<\/figcaption><\/figure>\n It also features integrations with companies like Zapier, Slack, HubSpot, Stripe, and more.<\/p>\n
Check out their example template<\/a>, and you\u2019ll see how eye-popping your proposal can be with their help.<\/p>\n
Some Pricing Questions That You Might Still Have…<\/h2>\n
“How much does the average WordPress developer charge per hour for their services?”<\/h3>\n
Or: “What’s the going hourly rate for WordPress developers?”<\/p>\n
Most WordPress developers don\u2019t display their hourly rates on their portfolios. However, here\u2019s some information on the going rate for the best talents on the different freelance marketplaces. All hourly rates quoted below are in USD:<\/p>\n
\n
- The top-rated Upwork web developers charge<\/a> anywhere between $20-$100.<\/li>\n
- On Freelancer.com the most hired developers charge within the range of $15 and $49.<\/li>\n
- On PPH <\/a> , the best talents charge between $15-$60.<\/li>\n
- Guru<\/a> has its highest-rated developers charging anything from $15 to $35.<\/li>\n
- Hourly rates for developers on Codeable<\/a> range from $70-$120.<\/li>\n<\/ul>\n
“How much should I charge to develop a WordPress site?”<\/h3>\n
Take the bottom-up approach, which we outlined above. If you aren\u2019t sure about the time, guess. If you\u2019re clueless about a feasible hourly rate, use Bonsai\u2019s hourly rate calculator to get an idea.<\/p>\n
Additional pricing information<\/h3>\n
In other articles, we cover pricing for services like:<\/p>\n
\n
- Hosting<\/a><\/li>\n
- Web Maintenance Services<\/a><\/li>\n
- Design Services<\/a><\/li>\n
- Additional Services<\/a><\/li>\n<\/ul>\n
Choosing Pricing Based on Your Income Goals<\/h2>\n
Now, you didn\u2019t become a freelancer or start a web development business to live on a project-to-project or month-to-month basis.<\/p>\n
You did so to lead a life of freedom! Which needs financial security. And you can easily get this if you charge your services in a way that supports your income goals.<\/p>\n
Check out this freelance rate calculator<\/a>. It will help you determine what your rates should be to meet your desired annual income target.<\/p>\n
Just input your desired annual salary and details of what you\u2019re currently charging. The freelance rate calculator will then give you an analysis of how you can meet your target.<\/p>\n
Raising Your Rates<\/h2>\n
Unlike a typical 9-5, which ensures a regular paycheck, what you bring in is determined by the rates you set.<\/p>\n
And speaking of a regular job, would you want to work somewhere where your pay never goes up? The same goes for working as a developer.<\/p>\n
You should raise your rates as your value increases with your clients and time goes by.<\/p>\n
After all, your clients know that replacing you wouldn\u2019t be great (and a pain), and you need to be paid what you\u2019re worth<\/a>.<\/p>\n
Your clients \u201cget\u201d you, and you get them. It\u2019s natural to raise rates, and you might find it surprising that it usually won\u2019t scare clients (and they\u2019ll happily pay you the new amount).<\/p>\n
We\u2019ll review how to do this \u2013 with insights from WPMU DEV members and more information from other sources.<\/p>\n
How to Raise Your Rates<\/h3>\n
So, how is it done?<\/p>\n
There\u2019s a fine art to raising your rates. You can\u2019t just send an invoice with an increased rate and expect your clients to pay without hesitation.<\/p>\n
You can do a few things to ensure a smooth transition to a higher rate.<\/p>\n
Allow for Plenty of Time<\/strong><\/p>\n
To start with, allowing time for the client to adjust to a higher rate is the most important thing you can do. Clients wouldn\u2019t respond too positively to surprise rate increases.<\/p>\n
Ensure that your rate increase is in writing. You can add the upcoming rate increase to a recent invoice (highlighted, if possible) and a separate email.<\/p>\n
A subject line of \u201cNotification of Rate Increase\u201d or \u201cRate Changes\u201d should suffice.<\/p>\n
There\u2019s no precise timeline, but a good 2-4 month notice<\/strong> is a good amount of time to let your clients know. This gives them months to adjust their budget and prepare. If you can let them know even sooner (e.g. 6-8 months out), that\u2019s never a problem. The sooner the better so that a rate increase isn\u2019t sprung on them.<\/p>\n
Also, when you get a new client, let them know that you may (or will) increase your rates periodically. This way, it\u2019s not surprising when a rate increase notification heads its way in the future.<\/p>\n
Plus, do not increase new client rates too soon. A good practice is to keep them at the same rate for a year rather than increasing the rate \u2013 even if the rate is upped for existing clients.<\/p>\n
A good working relationship with your clients is important before upping the price. Being as transparent as possible with your rate increases trust in your business \u2013 and you as an individual.<\/p>\n
Limit Increase Amount<\/strong><\/p>\n
A big question is: how much should I raise my rates?<\/em><\/p>\n
It\u2019s a good question to ask yourself because there\u2019s a lot on the line. You don\u2019t want to raise them too high because then your clients might leave (e.g. more than 50%).<\/p>\n
So, is there a magic number?<\/p>\n
Limiting rate increases between 5% and 10%<\/strong> is a good rule of thumb. That\u2019s not a huge percentage; however, it can add up quickly and won\u2019t put an enormous financial burden on your clients.<\/p>\n
How to Answer Your Clients on Why You\u2019re Raising Rates<\/strong><\/p>\n
This is the part that can bring some anxiety and nervousness. It\u2019s not easy to send an email mentioning a price increase. And the reality is that you might<\/em> lose clients after raising your rates.<\/p>\n
However, clients who trust you and know your worth will be okay with a price increase when you explain why it\u2019s happening.<\/p>\n
A common factor that pops up that justifies a rate increase is hidden costs<\/strong>. Things that you, as the developer, have to pay for DOES often change over time.<\/p>\n
For example, you may need to pay for hosting or outsourcing your design work. Maybe it\u2019s something as simple as you need a new computer system to handle the workload because your old system is outdated. Or, hosting costs went up, and you have to pay for covering the increase.<\/p>\n
At the end of the day, you may still have an unhappy client. At that point, you can reflect on the work itself.<\/p>\n
Are they happy with what you\u2019ve done up to this point? If so, is it worth it for them to continue working with you? Ask them these questions.<\/p>\n
As we mentioned, most good clients will accept and stay by your side if you follow what we\u2019ve discussed (e.g. not upping the rate dramatically on short notice).<\/p>\n
You may lose some clients or have a few clients hesitant to pay<\/a>, but chances are, they will be the clients that aren\u2019t the most valuable to you \u2013 and they\u2019ll be few and far between.<\/p>\n
How to Tell Clients About Increasing Rates<\/strong><\/p>\n
A simple email can do the trick. Or a phone call. Whatever is easiest for you and your clients. You know best how you communicate well with specific clients.<\/p>\n
If you go the email route, here\u2019s an example of what you can include:<\/p>\n
Hello (Client Name):<\/em><\/p>\n
When we started working with you, I mentioned raising my rates annually. I do this to cover increasing costs and to ensure I can fully provide you with the best service possible.<\/em><\/p>\n
On (Date) I will be increasing my rates by 5%. This will be reflected in upcoming invoices.<\/em><\/p>\n
I can\u2019t thank you enough for your continued business. I enjoy the work I do with you and look forward to providing you with the best service in the future.<\/em><\/p>\n
If you have any questions or concerns, please feel free to contact me at any time.<\/em><\/p>\n
Of course, this can be edited accordingly. However, in a nutshell, a brief explanation of why you\u2019re increasing your rates, how much it will be when it occurs, and \u201cthank you\u201d is best to include.<\/p>\n
How Other Developers Increase Their Rates<\/strong><\/p>\n
Here are some quotes from other developers (members) on how they handle increasing their rates:<\/p>\n
\u201cIf any of my cost of Goods sold increases, I need to constantly adjust my pricing. And when I learn a new skill or gain more expertise, I raise my minimum project starting cost to new customers but marginally will increase it to the existing customer by winning the fact that I am upgrading their technology and their user experience and make them feel I am constantly updating them.\u201d<\/em> Rajiv \u2013 WPMU DEV Member<\/strong><\/p>\n
\u201cTimes demand changes in prices, and as we get better, we tend to charge better.\u201d<\/em> Fabio \u2013 WPMU DEV Member<\/strong><\/p>\n
\u201cMarket rises and dips? No. My own constantly improving skills & experience level? 1000000000% This is the primary and only reason why I increase my rates. I only do this to earn extra funds, so I invest in doing quality work every time and leverage that to increase my rates going forward.\u201d<\/em>\u00a0Phil \u2013 WPMU DEV Member<\/strong><\/p>\n
\u201cWe have not adjusted prices due to changing skills. We were an established and experienced firm when we acquired the website group. We have increased prices over the years in response to the current market trends in our area and the fair salaries and benefits we provide our professional employees. Our current hourly rate for doing modification work on an established site is $102 \/ hour.\u201d<\/em> Jim W \u2013 WPMU DEV Member<\/strong><\/p>\n
\u201cAs my business has grown and I\u2019ve become more sought out, I have been increasing the dollar value of my proposals. I haven\u2019t had any pushback. I have also increased monthly hosting fees for a few of my early clients by $10\/month, with no reaction whatsoever.\u201d<\/em> Brad \u2013 WPMU DEV Member<\/strong><\/p>\n
\u201cThe rate has always increased commensurate with value, and always lagging behind the market. We always try to keep existing clients at the same rate and just start new clients with the new rates. They appreciate this and it\u2019s a part of the \u201cendearing\u201d long-term commitment that we have with one-another. When we have raised the rate for an existing client it was done with significant advance notice that gives them a chance to shop for different resources for the next project. They recognize that we give them that opportunity, again, because we are partnered with them to help keep their costs down while still using quality solutions. Since we continue to provide the quality solutions, they don\u2019t feel a need to look elsewhere. It works for everyone.\u201d<\/em> Tony G \u2013 WPMU DEV Member<\/strong><\/p>\n
\u201cI slowly raised my rates until I started getting pushbacks as I got started. I wanted to get to the point where I could charge what I need and deserve, while also being within my target clients\u2019 budgets and can provide the value they need. I\u2019ve also raised my rates as I built for my specific niche. What I have done is offer deferred payments to loyal clients who hit a rough month or with extraordinary circumstances. I\u2019ve also offered split-payment plans for projects with higher investments. This helps the client get what they need and it helps me with recurring income over several months, which I prefer over a lump sum followed by little or no income.\u201d<\/em>\u00a0Keith \u2013 WPMU DEV Member<\/strong><\/p>\n
The Price Is Right: Crunching Your Numbers<\/h2>\n
Knowing how to price feels nice!<\/p>\n
Hopefully, this article has given you ideas on how to set your WordPress development business pricing so you don’t undersell your services and charge clients what you’re worth.<\/p>\n
We’ve looked at quite a few numbers in this post, from hourly rates to project quotes to theme\/plugin prices. Remember that they\u2019re all subjective because pricing differs from project to project and from business to business.<\/p>\n
For additional resources that will help you advance your web development business success, be sure to read our articles on eight ways to get new clients<\/a> and our guide on the secrets to getting freelance work<\/a>.<\/p>\n
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