How much is custom web development?

Started by DenPavlov, Jun 28, 2022, 05:34 AM

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DenPavlovTopic starter

I'm running my own websites and programming since the 2000s.
I currently have my own dedicated server running cloudlinux and cpanel. I can code php, mysql, html & css.

I'm thinking about starting up a new company. (A "startup" as people today would probably call it.)
It would be something like but with a major twist. (I wont go more into detail here because its not necessary for this equation)

While i know how to run a server and how to programm, for me this is just a hobby and i do not want to be responsible
for the security of a website (including money transactions) that hopyfully thousands of people will use on a daily basis. (Or making sure it always works)
I'm also not familiar with modern cms systems like invision community or xenforo (last time i actively wrote plugins was in the vbulletin 3 days)
so i would have to study this software or write from scratch.
I figured it would be best to hire someone to write the application/addon (i will design it so it will just have to be coded)
and maintaining it and the servers longterm.

So i tried using google to figure out how much this would set me back but have found nothing.
I have an idea of how much time will be needed since i did some fairly extensive addons myself in the past.
So i know paying a professional by the hour will probably bankrupt me.

The thing is, are there freelancers that do not work by hour but by month?
How much would someone like this charge?

I would probably prefer to employee one competent (ideally local) guy (or gal) for the app developing and server administration.
How much would someone like this charge?

The thing is i know we are talking thousands for a project like this and thats ok, i have thousands.
I'm not expecting this to be done for a 100 bucks.
But it would be a startup on a limited budget. I dont have a 6 figure budget to burn. (But the risk to loose my complete investment)

I'm hoping to get some helpful answers as to what i would be facing financially.
I live in germany so pricing will probably be similar to like netherlands/eu or if i hired someone in california/us.

I'm totally clear i cant just go and hire a reputable, professional company for my budget.


this does sound pretty awesome/interesting. However, I don think that this is 2 requests. The web development piece, and the server management piece.

Can I ask why you prefer to have the tasks performed locally? You may find better rates with remote help.

I'm not sure how many companies offer to manage a server outside of their own infrastructure, at least if they are in the web hosting side. Have you looked at your current host and seen if they offer an management options? I know many webhosts (even for dedicated servers) offer management for +/- $100 USD a month with cpanel. Of course this depends on the host.

As far as the web piece goes, well this can also apply to the management piece, have you looked at UpWork, Fiverr and like websites that allow you to find either a freelancer, or even an Agency at a pretty good rate?

On the flip side, i recommend you check out the website offers section here, i often see some pretty good deals going around that might help you out. All depending on if remote or local is a deal breaker for you of course.

Just out of curiosity, is your server also located in Germany?


There absolutely are people who can do this on a monthly basis hourly basis. However , you're not going to really get quality work there .
I mean, if the person COULD get hourly work, why would they settle for less monthly? This is kind of insulting to the freelancer really
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design or development is a service, the cost of which should directly depend on the time spent on its provision. At the same time, if the amount of work exceeds at least a week, then in 10 projects out of 10 time will be spent either more than planned, or less. Such is the specificity of any creative activity.

That is, under no circumstances is it possible to accurately account for how many internal hours of employees will be spent on web design or development. This can be known only by the fact.

And yet, until now, a huge proportion of projects for custom development is based on a fixed price model:

- What is the price?
- $50K.
- OK.

It turns out that in order to develop it cost-effectively, productions are forced to include hours in the project assessment, which may or may not be needed. But the client covers them anyway.

And here, let's take a closer look. The risk premium is a figure that appears in the head of the estimator, based on his experience with similar projects. But how reliable it is, no one can guarantee: maybe he will lay + 10%, or maybe + 40%. As a result, the amount comes out, which, even without estimates, could be called "from the bulldozer".

It should also be noted that with a fixed price model, a conflict of interest often occurs in the implementation of the project.
In creating products, we first invent, and then we implement. In the process, changes or new ideas may appear, and the customer may quite reasonably want to implement them. And if these edits or ideas do not fit in with the original estimate, then the performer will also quite reasonably want to refuse them, and will convince that this is not necessary:

- Well, let's do this thing.
- Well, let's not.

It turns out that instead of focusing all efforts on creating an ideal product, one of the parties begins to squeeze the maximum for their funds, and the other begins to defend their rate of return.

What are the alternatives?
Some experienced teams lay such a markup in order to remain profitable under any circumstances and allow themselves to say "yes" to the customer more. But if, in fact, much less internal resources are spent, how ethical is this in relation to the client?

Another way is to spend a month onshore and draw up the most complete terms of reference, which will strictly regulate all the development conditions and the norms of changes. Not a step to the left, not a step to the right.

We did the same thing. It was a record year for the number of pre-litigation cases in which we sat together with customers and spent hours getting to the bottom of every definition of what a mobile version is and what it really should be.

I mean that design and development is not crushed stone, which has a clear size of fractions and the number of tons shipped. In any contract for IT services, there are blind spots that you can put pressure on if you wish.

Time & Materials.
The format of work in custom development, in which the rate is fixed for an hour of work of specialists, and the customer pays only for the hours actually spent on the task.

Before starting work, the studio gives a rough estimate of how long it will take to implement. But nevertheless, everyone understands that the final costs may differ.

1-2 times a month, the studio sends report sheets that indicate how much time and what it took. Acts are issued on the basis of them. If necessary, reports from programs that record time at work can be additionally attached. For example, from the Timing App. This is basically a useful software for Mac to keep track of where the time has gone in a day.

But with regards to control, I must say that, as in any remote work, it is better to follow not the hours that the web studio actually sits out, but the results that it shows.

About hourly rates.
To understand which rate is considered normal and which is too high, below I will offer a simple formula, where ± 30% of the result is a fair price.

(Specialist market salary /160 hours) × 2.5

The key expenses that are included in the rate are the employee's salary, taxes, managerial workload, and the margin itself.

But it should be noted that one studio may quote a higher bid but deliver results at a lower cost, while another may quote a lower bid but spend more hours on a task.

Therefore, to draw conclusions only from the rate is not entirely correct. It is necessary to estimate the time spent before starting the project, and accordingly, estimate the final cost. At least approximately.

Retainer or Out staff.
A format in which the customer rents a ready-made team for a certain period, and often connects it with his managers. The method provides that the studio team can work directly from the customer's office. Payment is fixed per team per month. If the project is large, then it turns out to be more profitable than with the Time & Materials model.

The logical question is - why hire designers or developers from the studio, if you can hire your own?
This was discussed in more detail in the article about the combination of own staff and contractors, but in short, there are three main reasons:

1. The level of competencies that will take a long time to hunt or grow.

2. Harmony. Their approaches and understanding of each other from a half-word.

3. No need to deal with the salary.

On my own, I would add that even when working with freelancers, it would be high time to leave the fixed price model in the past and bring the culture of paying for the actual time spent even to the most conservative clients.