[thelist] FW: R35 Talk: What to charge for web design

John Corry webshot at neoncowboy.com
Sat Apr 14 21:15:50 CDT 2001

Hey Sherrie...I posted your post to another list I'm on and got this pretty
down to earth reply that I thought you might like to see...


-----Original Message-----
From: R35-Talk at lists.r35.com [mailto:R35-Talk at lists.r35.com]On Behalf Of
Raymond Pirouz
Sent: Saturday, April 14, 2001 10:58 AM
To: R35-Talk Discussion List
Subject: R35 Talk: What to charge for web design


>hey guys...check this out...

Your friend has a common dilemma...and a dilemma that can not be
addressed in one email reply because it's an extremely complex one
that involves a NUMBER of factors. The mere fact that someone is
asking this question indicates that this person has not had much
experience in the real world...which is a problematic way of
approaching the real world...something that further indicates that
your friend has a "realistic" learning curve ahead of her...something
nobody can truly help her with - but herself.

That said, there is a BASIC rule of thumb to use when trying to
determine how one should charge for anything - whether it be plumbing
or web design:

1. Determine how much you need to survive per month...say it's $1000
which includes your rent, groceries, entertainment, etc. etc. etc.

2. Determine how many hours you are willing to work (and by work, I
mean WORKING on a project that will net real dollars...not fiddling
around)...say you can work 30 hours per week, which means you can
work 120 hours per month - now, again, these would be REAL billable
hours that no client would have to question...

3. Take the $1000 per month you need to live on and divide it by the
120 hours you can work...which leaves you at a $8.33 per hour minimum
wage. Now, you'd be a fool to bill $8.33 per hour for anything except
flipping burgers...SO...

4. Consider your equipment costs...you need hardware, software,
books, etc...your client's not paying for that, you will...so you
need to factor that into the equation...say $5 per hour. Now you're
at $13.33.

5. Consider medical costs. Is your client going to take you to the
doctor if you get sick? Add $5 per hour for that: $18.33.

6. Consider your liability insurance costs. Is your client going to
sue you? Or what if your friend trips over your Ethernet cable and
sues you? Add $5 more: $23.33.

7. Consider the off-chance that this job will not last
forever...yeah, you know...nothing ever does, so add $5 more: $28.33.

8. Consider your retirement. You're not going to be doing this
forever, are you? I hope you're not that crazy: $33.33.

9. Did you consider making a profit?? You don't want to work and have
nothing left over for real-world, last minute expenses that you
didn't account for in your initial plan, right? You KNOW...that flat
tire you didn't anticipate? Add $5 more: $38.33.

10. Consider everything else you didn't consider...that's right, this
is the real world, not make-believe...add $5 more: $43.33.

4. Consider your nice Uncle....Uncle Sam, remember? 1/3 of everything
you make goes to him unless you are in the 1% of America's wealthiest
who pay the least taxes because they know the loopholes, in which
case you're not reading this email. On $43.33 per hour at 120 hours,
that's a $5199.60 per month salary, $1715.87 of which goes to Uncle
Sam. In order to offset Uncle Sam's take, you will need to raise your
salary to $7800, the after-tax figure which will be : $5226.

5. Therefore, your revised hourly fee should be $7800/120 = $65.00 per hour.

6. If you think the above sounds crazy or unrealistic, you've got
some waking up to the "real world" to do, and have not fully taken
the MANY aspects of going into business into MAJOR consideration.

Now, granted, the above is the "smart" person's way of living in the
real world. The not-so-smart person's way is to work for peanuts and
struggle for the rest of their life, wondering "why is this happening
to me".

NOW, you may ask, how in the hell can I command $65 per hour? A
strong foundation,experience, experience, experience and more
experience. It's much easier to work with a team of people who -
together - bring the kind of experience and ability to the table that
helps BIG clients feel comfortable enough to pay these kinds of
"real" "living" wages.

This is the reason why many people simply work for others, so that
they can supply them with health insurance, hardware and software,
etc. etc.

Also, please understand that there are MANY more factors that help
determine how one should bill, why one should bill a certain way as
opposed to another way, etc. and many of them can not be preached,
but must be learned in the school of reality because most people will
just say "I don't have to do THAT" and will have to learn on their
own. Some learn faster than others.

I think that the future will bring us situations where we can have
these "groupings" of talented people working together for a decent
wage, but not literally having to be in the same building.



Raymond Pirouz | tel 626.296.1250 x 13 | fax 626.296.1523

R35.COM : Live the Internet Lifestyle(TM) <http://www.R35.com>

R35 shapes technology to help you work, learn and play better.

           Work @ R35 direct <http://www.R35.com/direct>
           Learn @ R35 edu <http://www.R35.com/edu>
           Play @ R35 films <http://www.R35.com/films>

Copyright (C) 2001 R35, Inc. All rights reserved.

  R35 Talk : Live the Internet Lifestyle(TM) <http://www.r35.com>

More information about the thelist mailing list