What each engagement has to cover
A price that only matches what others charge can still lose money. Start from your own costs. For a web design and development business, each engagement carries:
- Themes, plugins and licenses
- Subcontractor pay per project
- Card and payment fees, as a share of the price
Then a share of the costs you pay every month, however much you sell:
- Software and subscriptions
- Professional liability insurance
- Phone and internet
- Ongoing marketing
- Training and memberships
- Bookkeeping and tax preparation
And two things most first prices leave out: your own pay, and money set aside for income and self-employment tax on the profit.
Three prices worth knowing
- The price that covers costs. Monthly costs shared across your expected engagements, plus the cost of each engagement, grossed up for card fees. Below it, every month loses money.
- The price that pays you. The same, with your pay before tax added to the monthly costs. This is the real minimum if the business is your income.
- A recommended price. The price that pays you plus a profit cushion for slow months, repairs and growth.
The quick check above works out all three from your numbers. The pricing calculator shows each step of the formula.
Check your price against your area
Prices vary a lot by town, so we don’t publish averages. Collect real ones instead: ask three or more local businesses for a quote the way a customer would, and note what each includes. Then answer these:
- What do local competitors charge? Ask for quotes the way a customer would.
- How long does each engagement take you, including travel and preparation?
- How many engagements can you deliver in a week at a quality you’re proud of?
If the price that pays you is above everyone you found, that’s worth knowing before you start. Lower a cost, sell more each month, or offer something customers will pay more for.
Pricing mistakes to avoid
- Scope creep is the main risk. Separate the build from ongoing changes and hosting.
- Quoting every engagement the same when some take far longer. Price by size or difficulty, and set a minimum.
- Not counting travel and preparation time in the hours for each engagement.
Next steps
- Starting a web design and development business: the work, customers, licenses and how to test demand.
- Test a full web design and development plan: startup cash, the ramp-up, a stress test and a decision report.
- How to calculate your break-even point
- Considering a web design and development franchise? Compare the fees and long-term earnings with going independent.
General information, not financial, tax or legal advice. See our disclaimer.
