Like most web design companies we do charge a late fee which for us is currently 13% per month and this does cover many, but not all of the costs involved in short term borrowing. Anyone that has gone overdrawn will know that short term, unauthorised loans can be very, very expensive. It really is the case that going £20 overdrawn can sometimes cost hundreds of pounds if not dealt with quickly, and these fees seem to be higher on business accounts. This problem is exasperated on very small projects whereby the 13% fee only accounts for a very small percentage of the borrowing costs. Even when late payments result in minor borrowing from our own working capital overdraft, this can still be costly when combined with the efforts and time required to chase up the payment.

We also charge a deposit upfront for all websites and for all maintenance and design jobs that are with new clients. The exception to this rule is with long term clients requiring small amounts of maintenance work in which case we typically do not ask for a deposit. A deposit only covers the most basic of costs however and it can still cause major problems when a client is slow in generating that final payment.

The are many solutions to this problem, the most obvious is to increase our rates slightly to cover these costs and the new expenses incurred by the current economy. We pride ourselves on being competitive and are not very keen on this plan of action. Another solution would be to increase the late payment fee, which would act as a greater deterrent, however it could cause serious issues when clients are chasing payments themselves (we work for a lot of other web design firms who hire our expertise).

Instead of the possible solutions mentioned above we are pondering on reducing the payment terms from 28 days to 14. In return we would keep our rates the same as they have been since 2009 and also offer additional incentives to those that pay within 7 days. The downside to this solution is not all clients are able to generate funds within that amount of time. Inflation is a constant force however and there will of course become a time when we will have to adjust our prices accordingly.

One final issue we have to consider are cheques. Often we are sent cheques by 2nd class which then take a further week to clear making a payment that should have taken a few days go well over the payment terms we offer. Mostly, I blame the banks for the cheque situation, it really shouldn’t take a minimum of 5 working days to move some money about and small businesses would greatly benefit if cheques were banned completely. We are considering phasing out cheques eventually by offering an additional incentive to pay through quicker methods. (We currently offer a £1.50 discount on all invoices paid within 7 days via BACS. Maybe we can improve on this.) One problem we have with banning cheques is that we are hired by a lot of charities and often they can only pay this way since there are complications with trustees and the signatures that are required to release a payment.

A final thought is this: I find it odd that in our industry we are typically expected to offer interest free credit at all. If I go into a furniture store and purchase a sofa for example, I would be expected to pay for it in it’s entirety. It’s true that some places do offer credit which is often charged at credit card rates. Sometimes it is indeed 0% but any credit is only given after a credit check has taken place and it is certainly not taken for granted that this credit will be offered at all. I wonder how the situation evolved so that designers, developers, writers and other professional creatives are expected to offer interest free credit when they have to pay heavily for the same privilege themselves?

I have written this piece because I am very curious about how other professionals and actual clients feel about this whole subject and I would fascinated to know what you think and if you have any better ideas.

The client was very pleased with the end result which you can see below:

The show was split into 3 parts and makes fascinating listing.

Click the links below to listen:

» Listen to part 1

» Listen to part 2

» Listen to part 3

Additionally, you can visit the website here.

We have been featured in this magazine a few times before, along with others, but it’s always nice when a marketing campaign proves to be successful. The sauce campaign was a big hit with our clients as well an it brought in some extra work which is always nice. We will have to think about our next promotion very soon!

If you want to read the article for yourself, the magazine is out now and can be brought from any decent UK magazine store such as WH Smiths or online.

When I first started working as a freelance web designer, about 10 years ago, I was extremely naive. It was only several years later that I realised just how much I had undervalued my own position as a web professional. I was building websites for just £500 each and earning less than the minimum wage. To be fair, I wasn’t very good initially – and counter to popular opinion it takes a long time to become a professional web designer. Regardless, it didn’t seem right that after spending over 6 years in further and higher education that I should be earning less than a bin man. (No disrespect to the bin men, they are the smart ones for they didn’t spend a decade training how to do their jobs before receiving their first pay cheque.)

What was the point of all of that work, and even worst, the tens of thousands of pounds of debt I had acquired paying for this so very expensive education. Even as a lone freelancer and with my then minimal overheads my earnings did not cover my bills and I supplemented my income with a (better paying) part time job. It didn’t occur to me that I was actually worth more than £5 per hour, after all I loved building websites. In time as I become more experienced in the art of running a business I gradually put my prices up to cover my expenses and make a marginal profit in-line with the local competition. I was eventually able to rent an office and take on staff whilst continuing to offer a constantly improving service at a reasonable price.

Those early learning years are long gone, but just recently painful old memories came to surface. A couple of months back I was rather surprised by what a potential client said to my partner in a meeting. She was told that the client wanted a 5-10 page website and a logo designed all within the set budget of £300. When asked where he had got that particular figure from he stated that it just seemed about right. Essentially, that was what a website was worth to him, it’s intrinsic value. Regrettably we had to turn the client down, explaining that although we do work on smaller sites sometimes, the logo design alone would cost more than his entire budget. Incidentally, a logo is more than just a graphic, it is the basis for a whole company’s corporate image. It should have some innate value placed upon it. Regardless, we are able to offer quality logo design at a very competitive price, which is slightly more than our would be client considered was the value of a website.

What do people other people think?

This got me thinking. What value do people that do not understand the process of web design place on a website? To find out, I posted this question as a poll on my Facebook page and asked everyone I knew that did not work in the web design industry. The results were fascinating, if not a little alarming.

I asked the following question:

“How much does it cost to build an updateable (text and images) 10 page website with logo. I would appreciate it if you could list how long it would take to build as well.”

The question is purposefully vague (and besides Facebook doesn’t allow you to use more than a couple of sentences!) since I was hoping to measure people’s overall perceptions of value rather than get bogged down with technicalities. To a web designer the question is also rather open to interpretation – I did not state whether the content would be updated via a custom built content management or by using cheaper third party components. I don’t claim this poll is particularly scientific, however it does shed some insight into how my friends at least value websites.

The answers ranged for just £8 to £4000 with a mean average cost of £737. Over half of the people that answered valued the cost of such a website under £500. Furthermore, 85% estimated below what we would charge for such a website. Even more interesting than the actual results were people’s comments. Here are some that nicely demonstrate how people value a website.

“I think £100-£200, and if I had Dreamweaver I’d knock up the basic design in a day or so and take perhaps a week or two to refine the look with images, text and sounds. ”

“I chose £200-£500 assuming I’m allowed to use ready made scripts to do the updatable part rather than writing the code from hand. Also, it can be done cheaper, just depends how much you want to be paid. If I was down on my luck I’d do it for £50.”

“I’m really not sure what would be involved Harry, but for something simple I would have thought about 8 – 16 hours work? £200-500 in total and around £100 for the logo. This is purely a guess though. ”

“I have literally no idea how long it would take. I imagine it would involve an incredible amount of work so I am guessing £1500-2500 based on the fact your website wouldn’t be the only one the designer was working on it would be a while. ”

This last one is actually the most accurate, and if we were to quote on such a project we would probably quote around the £2000-2500 mark. Reassuringly, this person seems to understand that there is a lot of work involved. In terms of our pricing, we are about average in the city we are based – some people are slightly cheaper and some are more expensive. Also, I think we are probably about average for a medium sized web company based in a large town or small city. In our city, I know of one company that would charge £250 for the hosting, £50 for the domain name and £75 for the initial consultation, already maxing out the budget of the client that we had to turn down – even before any actual web development work has been undertaken. A larger company in a bigger city such as Birmingham or London would charge 2 or 3 times more and in contrast you could probably get a freelancer at the start of their career to develop such a site for around half of our rate since they would have few overheads and a keen interest in building up their portfolio. A student would cost even less.

You get what you pay for at the end of the day.

About our costing

It is very interesting to note that everyone of my friends that gave an explanation with their vote calculated the price purely in terms of work per hour. No one put any value on the website itself, or worried about overheads such as staffing and software licensing.  I certainly didn’t see anyone factoring in decades of training into the equation. It seems the main perquisite is owning a copy of Dreamweaver (which incidentally costs hundreds of pounds).

To give you a real idea of how we come to the figure mentioned above, the following factors must be considered as they are preformed by all decent web design companies (although of course, prices would vary company to company – I have just used averages).

• Initial phone consultation
• 1-2 hours research and planning
• Initial face to face consultation
• 2-3 hours further research and planning in preparation to the brief/proposal
• Brief/proposal to be written up and posted with contract
• Hosting, domain name and email set up at around a cost of £100-200
• Content provision/sourcing
• Possible hire of photographer at £350-500 per day
• Initial designs on logo and website
• 2-4 rounds of revisions for logo and web design
  (2-3 weeks hire of web and logo designers at around £20-75 per hour each)
• Development of Content Management System
  (1-2 weeks hire of web developer (programmer) £20-75 per hour)
• 2-3 days testing
• Launch

Additionally, every company has to pay for offices, accountancy fees, broadband, computers, software, heating, staff wages, phone costs, call minding services, transport etc. Looking at the above list it amazes me that people generally value a website considerably lower than it’s raw costs, not even counting any intrinsic value. Maybe this is because websites are not tangible things and they are not widely understood, however since everyone uses the internet daily, everybody feels they should know the value. It is certainly interesting to note than many people don’t blink at a plumber charging £300 to fix a broken pipe, whereas they may expect a whole team of trained web designers to work for over a month for less than £500 (admittedly, this is normally, but not always on more than one project at a time).

Is this a little unfair?

Perhaps it is a bit much to expect people that have never worked in this industry to understand the costs involved in creating a website. Indeed, most of the work done is never even seen by the client or end user – the vast majority of the work done any any website was done in the proceeding years while the designer trained and practised his or her craft! Perhaps also it takes years of working in the business to realise that there is a lot more to a website than merely “design and build”. I wonder how accurate I would be estimating the costs involved in something I have never worked on before. I doubt very much that I would expect an experienced architect to design me a house for £200, and part of me wonders would my Facebook friends give this job more value than a website because a house is tangible.

Conclusion

To be honest, it doesn’t really matter what the average person in the street or on Facebook thinks about the value of a website as far as our business is concerned. However, I am concerned that there is a wider problem here. We are all so reliant on technology such as the internet, yet only a very few people (once called geeks) seem to understand this technologies’ worth. They have this understanding because they are part of the technology drive, a demand ultimately caused by the average guy in the street who does not understand it fully.

As I say, this does not really affect us significantly though – it merely interests me. Typically potential clients that have found us already know the approximate cost of a website. We tend to work with already established owners of businesses, most of whom have already hired web designers in the past. As a provider of a bespoke services, we are lucky in the fact that we can choose the clients we work with, and we like to think that most of them value us as much as we do them.

I would love to hear your comments on this matter.

Ten years later and almost everything has changed. George Bush Junior has been replaced by the first black president of America. Becky is now my wife and thankfully I no longer design websites with tables or use GoLive.

Technically a lot of other things have changed for the web design industry in this time. Internet Explorer 6 is officially dead and I doubt many people will mourn the loss. (Sadly though, although IE 6 has gone, IE 7 and 8 are terrible browsers that cause web developers problems worldwide.) You can do things today with websites that simply were not possible back then and our whole understanding of web technology has changed considerably.

The web is more than just technology, and it changed people on a vast social scale. So much so that Web 2.0 feels like an outdated phrase. With the web becoming such a big part of society, everybody is now connected. People that have always been Luddites now have their own Facebook and twitter pages as well as internet enabled Wii consoles, Blackberries and iPhones. It is a strange time indeed! As well as the many benefits this brings, it does also create what I consider to be a major failing of the industry. There simply are no real standards, and this is exacerbated by the fact that many people think that web design is only about technology. That to build a website all you need is a copy of Dreamweaver or to be the kind of person who builds computers. This, I feel, has reduced the overall quality of websites, with many people hiring computer enthusiasts rather than designers to build their sites. There are still people building websites with Microsoft Word and no understanding of HTML and CSS let alone a strong background in art and design, an understanding of layout, composition, colour theory and typography. Web design is art and science, and one without the other reaps very poor results.

I am hopeful that my minor gripes with the web design movement are transient. So much has changed in so little time, something that no doubt will continue.

Although many people found the whole incident rather amusing, this was not the case for us. Not only were all of our websites offline for over 5 hours – we were being represented in a rather important meeting at the time. Teams of people from the UK, Romania, Slovenia, Greece and Germany had all flown to Athens along with members from The Culture Programme of the European Union who were funding our latest project. They would have collectively travelled thousands of miles, and instead of viewing the private beta of our website, would have witnessed a rather dull “Server not found” page. We were not happy. More importantly, they were not happy! Several feverish and rather expensive phone calls later and we managed to explain that there was nothing we could do and it was simply a case of waiting it out.

BlueSqaure - one of the UK's largest datacenters.

Eventually, with no sign of the site coming back online any time soon, the meeting was postponed until the following day. It didn’t end there though! Halfway through the demonstration of our website  the internet cut out due to ISP strikes in Greece! In the end, the meeting finally concluded and most of the partner countries involved in the project got a fairly decent look at the website.

It is a fact that with technology, sometimes things just go wrong and there is nothing you can do about it. It is just life and you just have to take the rough with the smooth. At the time it may not seem like things will get better but they generally do. The internet outage suffered by us and many web professionals was a freak incident not likely to happen again any time soon, and we can happily say that all of our websites are up and running smoothly (including this one) and the project mentioned above is progressing very nicely and should be launched in a couple of weeks.

Some websites really don't have a purpose....

• Vanity websites
  Often, websites are created simply to appease the egos of the creators or the people that the website represents, with no other real reason justifying all of the hard work and money involved in such a venture. Many design companies will undertake this work because, at the end of the day a job is a job, right? I believe this is a mistake and both the client and the development team will ultimately feel unsatisfied with the end results, as the work is nothing more than an exercise in futility and ego stroking.
• The “everyone else has one” syndrome
  Probably the worst single reason someone can buy something, be it that fancy new iPhone, pair of shoes or indeed a website, is because everyone else has one. I would say this is even a bigger mistake than owning a vanity website which at least performs some kind of purpose, however wasteful and vain. Websites are expensive. It often takes a team of people weeks if not months to build a site. Conceptualising, designing, managing, hosting, updating, administrating, tracking, testing, optimising and maintaining are just some of the things that people have to do when taking care of a website. To do all of that with no purpose in mind is not only wasteful, it’s downright stupid. The time and money spent on a website in this scenario would be far better invested in other aspects of a company’s business.
• Pointless websites
  Probably the biggest issues with unnecessary websites are due to bad planning and poor understanding of how a website can benefit a company. The blame often lies with the design company who should explain the benefits as well as the drawbacks about having a particular website built. Although websites are commonplace now and nearly everybody in the Western world has experienced the web in some form, there are still times when the time and money involved in building a website would be better spent elsewhere.
• Copy-cat sites
  It is a sad reality that nearly all web designers, us included, have been asked to build “Amazon but better”, an “easier to use Ebay” or “Facebook for the elderly”. The simple fact is that these markets are taken and if you wish to complete with them you need to find a real niche, a workable one. Sites like Amazon and Ebay have hundreds of investors and literally millions of pounds (per year!) for development. To think that you can compete with those kind of resources for a couple of thousand pounds is delusional.
• Plain bad ideas
  Sometimes people just have bad ideas that won’t work. It pains me to know that many designers will be aware that their client’s “next big thing” is doomed to fail and cash in the cheque anyway. Designers know about the internet — they study trends, have a lot of experience building sites and generally they can spot a doomed one a mile off. Honesty may hurt in the short term but it will save you a lot of heart ache in the long run. A successful website is good for everybody.

The Solution?

In a word: honesty. All of the above named problems can be rectified if the client is properly informed in the initial consultation. Nearly everybody thinks their website is going to be the next big thing, otherwise they wouldn’t be meeting up with design companies offering to pay good money for them. It is our job to inform the client about potential problems as well as trying to work out how to make their site really become the next big thing. Designers need to take a bit more of a responsibility when it comes to pointing out when a project is not workable or an idea is not original instead of thinking about the pay cheque. Happy clients breed even more happy clients just as unhappy ones will damage your reputation.

As a client, the next time you want a website ask yourself “why does our business need it?” and “what do we want it to do?”. Thinking about these very important questions before meeting your web designer will save both you and them a lot of time and money.