Pricing

I am probably going to become an outcast for coming clean about our pricing formula for web production (design and development) services, but I believe that this is the right thing to do for our customers, total disclosure. No web development consultant can deny the situation that we often find ourselves in - the moment when we are required to tell the client how much the project will cost. The tension is thick. Unfortunately, the events that follow the pricing question are often reminiscent of buying a car from a poker-faced and constantly bluffing salesman/woman who will take the most you will give.

iDonny Productions is hereby taking the bold step of disclosing the simple algebra that goes into determining the price that our clients pay for the good work we do. Below is a clear explanation of how we arrive at the hourly fees for Drupal, and general Web design and development tasks.

1. Base Pay: If you were to hire a permanent Web Developer to work for you for a total of 40 hours x 4 weeks x 12 months you would have to pay between $90,000 and $110,000 (You can check AIGA/Aquent or your favourite resource for current salary figures); that is before you add the cost of benefits, office-space, communication, and other facilities necessary for work.
2. Operational Costs: Beyond the base pay explained above, facilities are necessary to realise the scope of your project. These are in form of: Project Management tools, office space, telephone, Internet access, Computer Equipment, Software, Development Servers, and backup whose cost adds up to $11,760 per annum
3. Employee Benefits: The cost of providing healthcare, insurance, and other necessary benefits adds upto $13,154.16 per annum. Holidays, vacations, sickdays, personal days  etc will account for upto 8 weeks every year
   
4. Business Stability & Profit: Businesses need to make profits to obtain new skill-sets and grow to provide better services. Profile is calculated as 25% of the final figure form the above costs
5. Calculation:Below, we will add all the numbers and divide the sum by the (10 months x 4 weeks x 40 hours) = 1600 hours a year

The Math:

1. Benefits: $13,154,16
2. Operation costs: $11,760
3. Base Salary: $90,000 to $110,000
4. Sub-total: $114,914.16 p/a to 134,914.16 [based on 1600 annual work-hours]
   
5. Business Stability & Profit: 10%-25%

Whenever contracts are agreed-upon and signed with advance notice before projects are set to begin and invoices settled within 15 days of issye [NET:15 Terms] the following rates are applicable (progressive discounts applied) when the project scope and required time schedule is committed and binding  by the
following dates:
1. 21 days or more: $65/hr
2. 14-20 days: $80/hr - for the first week of work, the next scheduling rate applies thereafter
3. 7-14 days: $95/hr - for the first week of work, the next scheduling rate applies thereafter
4. 3- 7 days: 110/hr - for the first week of work, the next scheduling rate applies thereafter

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