Estimating our expected time for potential projects used to represent a significant part of our days. Six years ago would find four of us plugged into a room grinding through the details of a bid – guessing at how much time it would take, guessing at how much the client might be willing to pay, trying to account for our schedule, etc. It wasn’t scientific, and it definitely wasn’t efficient.
Today I hear a client explain a need, and I have a number in mind before I leave the room or hang up the phone. There’s a lot more to providing a useful proposal than gut instincting a number, but something has changed. It’s easier to forecast our necessary time commitment, and there’s definitely a lot less guesswork involved.
Tonight I was asked by a university prof to give some thoughts on developing a proposal, specifically on how we come up with numbers. I told him it was pretty easy, just take the number of expected pages and multiply that by $1,000.
That, of course, is only a joke (one that he’s apparently already heard.) Being the geek that I am, I told him I’d blog it out tonight if time permitted. It did…
Assuming the n x k = $ agency proposal equation isn’t a solid way to estimate project cost, how do you do it?
Well, if you is us, a web site development proposal usually has a few components:
- Design / Usability.
- Build / Accessibility / SEO.
- Content management.
- Transaction handling.
- Marketing / promotion.
- Content generation.
- Other things.
Our proposals incorporate the first three of these categories at a minimum. (Web app proposals have a slightly different make up.)
We allow at least 25 hours for a site design / interface, taking client feedback into account. We allow a little more time than that for setup, build, and content management for a two-tier site architecture (landing page, sections, sub-pages.) Accessibility and SEO (eg: semantic markup, relevant keyword placement, et cetera) are typically part of our build. So, assuming an hourly rate of $100/hr, our hypothetical base proposal goes out at approximately $5,500.
Transaction handling (eCommerce) starts at around a 25 hour baseline as well but increases based on a number of conditions including display characteristics, merchandising options, compound shipping rules, tax grids, etc.
Marketing, promotion, copywriting, etc. are topics that I’ll push off – speaking towards a common denominator in these categories is more difficult. Each project we take on has unique needs.
Good, better, best
Our development proposals are based primarily on expected time. (Value is a consideration as well, but probably not as much as it should be.) With this in mind, we have to estimate the level of effort in terms of time spent that we intend to invest in each project. We can spend a little time and provide good. More time gets better. More time yet gets best.
Budget is the reason for the good, better, best scale. We haven’t met a client yet that doesn’t have one. Until we do, we aim at proposing better and do our best to explain this in our conversations.
Proposals, scope of work, invoicing
An agreed upon proposal leads to a scope of work outline with development timeline and payment schedule. We get a signed scope and relationship contract, we get started (we typically invoice 50% up front as well.)
When we propose a number, that’s what we invoice. You’ll never hear us say “it took a little longer than we expected…” If a client wants to stray from the scope of work, that’s fine. An addendum can move the price up or down. Feature creep is very avoidable as long as you keep the process clear.
Disclaimer
Again, this is just how we do it. There are certainly cheaper providers out there, particularly in the freelance world. But our clients rarely list price as their first consideration in selecting a vendor, and it’s even more rare that we knock anyone over with cost estimates.
Our average projects tend higher than what I estimated above as well, but the question that prompted this post was aimed at a baseline, professional site.
That’s all I got – do with it as you will.
3 Responses to “Estimating cost of development – how do you price a website?”
What is your budget?…
How do you price it indeed? Estimating cost of development – how do you price a website? answers easily -……
This is where low-scale outsourcing comes in to help designers like you guys. Imagine if you were to take just your XHTMLising and ship it to India, and we give you code thats validated and cross-browser compatible…low risk and good value. You focus on design(which is very difficult to outsource) and we code at costs that would help you make a decent profit. Everybody’s happy. “Production outsourcing for pure designers.”
Hello Yagna. That’s actually an awkward part of the process to outsource if you’re not a pure designer (we are not.) We’re fast at xhtml production. We’re extremely picky about it. And we’re integrating seo and cms during the process. I could see it working for some, though.