Last week I posted about how much custom WordPress websites should cost. If you read that post, you know that it depends. Generally the feedback was fantastic, but many readers took from that post that they should raise their prices.
I mentioned in the post that I’ve worked on web projects ranging from $1,000 to $100,000. What I didn’t note is that I’ve made just as much — or more — profit per hour on $1,000 websites as I have on much more expensive projects.
Revenue is not the same as profit
Projects that cost a lot of money can break you just as easily as they can make you. We should consider the value of our projects based on not only the revenue, but the profit potential.
If I can perform a $1,000 project in 5 hours, including project management, I’ll do it. Every. Day.
Who doesn’t want to make $200 an hour? That’s a pretty great rate. I would rather do ten of those projects versus one $10,000 project that gets out of hand and takes 400 hours — 10 full time weeks isn’t that crazy of a number — where I end up making $25 per hour. It’s obvious, right?
Now think back to some of your projects. Have you created websites for $1,000? $3,000? $10,000? $30,000? More? And at what price point did you find yourself to be most profitable? What made it so?
Qualities of profitable (small) web projects
In the last post on pricing, I talked about the client multiplier for project management. It was mostly well received, and I got a lot of “Oh, man, I need to do that.”
And that’s probably because people could relate to projects that get out of hand and end up being expensive.
Great Project management
So, project management is obviously a huge factor for making projects successful. But project management isn’t something that only the client can screw up. We — as consultants — can very easily bungle a project. And it’s our responsibility to make “easy” and “difficult” clients successful parts of our web projects.
Either way, we need to make sure to keep project management a minimum. We can do this by automating tasks — check out Jennifer Bourn’s interview on WP Elevation for some great tips on this — and ensure our client isn’t going to require a lot of hand holding.
For a $2,500 project, if you’re charging $100 per hour, keep project management to fewer than 5 of those 25 hours. If you can’t do that, charge more or turn down the project.
This morning I listened to the latest episode of Businessology — a fantastic podcast if you’re into posts like this — and they started their series on onboarding clients.
Onboarding clients well is hugely important. Unfortunately, it’s costly. It takes time, and if you don’t price the client until after you onboard them, then that’s sunk cost into your business.
So you either need to price onboarding into every project that makes up for the projects you lose, or you need to charge for that time.
Proper onboarding for small web projects can be pretty simple. Essentially, you need to “lay down the law” and set expectations very, very early. I’m going to use a $2,500 budget for my example onboarding. That could go something like this: Read Full Post