Pricing is tricky, to say the least. And no doubt you’ve had a similar conversation to this one I had recently with a massively popular (and profitable) blog I wanted to write for:
Client: “I’m sorry to break this to you — but you’re nowhere near the $XX rate.”
Me: “Thanks very much for your feedback. Much appreciated 🙂 Cheers”
Whether you’re a writer like me or a developer or designer, no freelancer wants to work for peanuts. Maybe you offered a client an estimate and didn’t hear back? Or, maybe the client got back with a reply similar to the one above?
Yes, they found you overpriced and when you ask around for advice you’ll hear:
“There’s nothing such as a market rate. Only you can decide what you’re worth.”
Etc. Etc.
Yes, it’s all true, but it doesn’t generally apply to absolute beginner or intermediate-level freelancers.
Of course, if you have a shiny portfolio, or if your calendar is booked out for months in advance (because you’re that good) then sure, you don’t have to think about the going rates or about what other people are charging.
However, we know that’s not how freelancing is for all of us.
And so in this post:
- I’ll show you a surefire way to price your projects so you’re never underpaid.
- If you aren’t sure what your hourly rate should be, we’ll look at some crowdsourced data and the going rates on popular freelance marketplaces.
- We’ll also see some tools to help you validate your project estimate and ensure that it’s not way off the mark.
- And in the end, we’ll see how you can meet your annual monetary targets using some cool freelance rate calculators.
Note: This guide is not for you if you’ve reached a point in your career where you charge what you want.
With that in mind, we’re ready to begin. Let’s start with the most accurate project estimating technique that applies seamlessly to all kinds of WordPress projects.
Beyond the Hourly Vs. the Flat Fee Debate: Bottom-Up Estimating
So, what’s bottom-up estimating?
Dick Billows from 4pm explains:
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.
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. Next, you roll up these numbers to get the final project quote.
For example, for a WordPress site development project, the typical stages include:
- Planning
- Implementation
- Testing
- Review
- Client training
- Content upload
- Soft launch (and launch)
- Post-launch support and maintenance
If we had to apply the bottom-up estimating technique to this, we’d further break down these stages into the actual tasks for each.
At the task level, here’s how this project could look like:
Planning
- Plan IA
- Sketch out a sitemap
- Determine the technology stack
- Understand the functionality to custom code
- Understand the functionality to prove via plugins (with or without customization)
Implementation
- Build the website
- Install and fine-tune plugins
Testing
- Check overall functionality
- Check for broken links
- Check sitemap
- Check for access
- Check performance metrics
Review
- Showing the site to the client
- Do one round of revision
- Submit for re-review
Client Training
- Show the client the way around the site
- Explain updates and ways of uploading content
And so on.
Once you’ve broken down a project like this into individual tasks, the estimating begins. And because this estimation technique takes into account every task of the project, it ensures that you’re paid for all the work you do. Simple.
To apply the bottom-up estimating technique to calculate your project quotes, follow this simple three-step process:
Step #1: List each task you’ll have to perform as part of the project
Don’t skip even the smallest of all tasks. You’ll be surprised to realize how much work you actually put in.
Step #2: Determine how long each of these tasks will take
Don’t club any of the tasks together; add a time tag to each.
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.
But what if you don’t know how much time you take for the different project tasks?
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.
When you make such “guesstimates,” it’s possible to be over ambitious. You may think that you’ll choose the technology stack in five hours, but you might end up taking a full day. So don’t go with your first estimate. Consider these three things:
- The best case estimate (a)
- The most likely estimate (m)
- The worst case estimate (b)
And your final estimate (E) becomes: (a + m + b) / 3.
(This is a type of three-point estimation.)
Remember: tasks will always take longer than you think!
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.
To find this out, use a time tracking tool. Toggl is a great option to consider. It has apps for all major platforms, so you can track time even when you’re working locally. You can also set Toggl to launch when you start your laptop. This way, you won’t forget to log your work hours. Also, with unlimited clients and projects, Toggl’s free plan will cover you fully.
Step #3 : Add up all the time estimates and multiply with your hourly rate
The result is your project estimate. Add to this estimate the time that goes in communicating and collaborating with your client – don’t discount this time because it can add up fast if it’s a big project that will involve a lot of discussion.
Some freelancers also recommend padding such an estimate out with a few extra hours, just in case.
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.
But Wait… What If You’re Clueless About Your Fair Hourly Rate?
If you have no idea of what a fair rate will be with the skills and experience you have, try using Bonsai’s web developer hourly rate calculator.
