My lowest rate is $100/hr, as a single-person consultant with almost no overhead. Some people charge lower rates for different types of work--like documentation--I see no sense in it, since it's still tying up my time and that's what is being bought. My preference is to tinker on my own projects and not work for other people; the client's job is to entice me away from my preference.<p>I charge extra for anything I don't want to do. It's $300/hr for VB6, Crystal Reports, or MS Access stuff. I know the client can get someone else to do it cheaper. They frequently tell me as such, clearly missing the point that I <i>want</i> them to get someone else to do that shit. There is no way that stuff helps my long term development.<p>No, I don't stay 100% active with these prices. I have a steady 20 hours a week of work at $100/hr. Does that make me more or less rich than a person working 40 hours a week at $50/hr? Hard work is for suckers.<p>People complain about me being expensive until I release the first milestone. After that, they tend to shut up about the price. What's cheaper, a $25/hr developer from Croatia who takes 6 months to deliver the project, or a $100/hr developer who takes 2 weeks, with the added bonus that it actually works?<p>Something that always bothered me when I was a working stiff: I was always evaluated for pay based on how old I was, whether or not I was married with kids, and whether or not I owned my own house. No, no, no, you pay me based on what I can do, not on what I need. That's why (amongst many other ethics-related reasons) I consult now.
This is a great post, an unusually great one on this subject, and I only have this to add: don't charge hourly. You can break your finances down by the hour if you want, but your customer should interface with you on a day-rate basis, or, if you're ambitious, a week-rate.<p>I'm not sure I've ever talked to someone who moved from hourly to daily and regretted doing so.
I'm still new to freelancing, so I don't have a ton to add, but I'll note that many freelancers (myself included) don't interface directly with the customer. As a solo programmer, I do a lot of work for firms that themselves are working with the customer.<p>Being one step removed from the customer means I don't have as much bargaining power to charge based on the value I'm providing. The firm I'm working with has already charged based on value, and now I need to fit within their budget.<p>I know the answer is to "break out" of this situation, but especially as a programmer (and not designer, marketer, etc) I've found it difficult to charge based on business value when there is a sea of programmers out there willing to work for way less than me. Just to be clear, I think this is good advice, but boy, implementing it is a daunting task.
A small suggestion (and boy I do <i>not</i> have this all figured out yet)<p>Charge by feature, estimate in your head how long a feature will take, multiply by your secret hourly rate, and say that will cost X dollars and be ready at the end of iteration one.<p>This is good for several reasons<p>It ties the billing cycle to a feature a client wants instead of to your time which they could care less about.<p>It focuses on the clients features - so you are always talking their language. I am trying to get client to write a press release for the feature (think scrum story but more visceral)<p>The aim is to break down the project into chunks the client cares about and thinks about in their terms and then to charge for it in increments that are of value or interest to the client. Usually this is on the order of days - this way you are charging very small fixed cost projects - reducing your risk whilst getting off the per hour billing mindset<p>It also allows you to find any way, some way to measure business value from the feature (hits per day, minutes saved per sales call - whatever)<p>Being the person who talks in their ideas, and shows how they brought in more revenue or higher kPI is a good place to be.<p>Then raise your secret hourly rate, and features just get more expensive. Instead of arguments about hourly rates and full time salaries
The Founder & CEO of Freshbooks released a free eBook on this topic. Really quick read and I found it useful. <a href="http://breakingthetimebarrier.freshbooks.com/" rel="nofollow">http://breakingthetimebarrier.freshbooks.com/</a>
As a freelancer I think overall, clients prefer fixed prices over hourly rates. I take this approach, if project takes less than 10h I bill per hour otherwise I offer different packages and add-ons. Say client wants a fairly big responsive site with WordPress backend etc:<p><pre><code> ---- Essential ----
* Basic site (static, up to 5 pages)
* 8 extra pages
* WordPress + Blog
* Mobile/Responsive Layout
* Social Media Integration
* Usability, feedback by professionals
* Basic SEO
---- Additional ----
* Maintenance 24/7
* Setup server and domain
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These packages have a fixed price that has been pre-estimated in hours. Obviously not every project is them same, so sometimes you work more and sometimes less that what was quoted. For out of the ordinary features such as complex grids, user profiles or highly dynamic sites I estimate the extra work in hours as well and add it to the total cost.<p>Then I divide the project in 3 milestones: Pre-Production, Production and Post-Production. A 25% deposit must be payed after signing the contract, another 25% after Pre-Production and the rest on completion. The contact also clearly states that any major changes in layout, design or content after the Pre-Production phase will be quoted extra.<p>This has been working for me over the years. Clients seem happy with the process.
Hourly rates undervalue consultants. It is a simple price based on quantity that we place on the front of customers, and have nothing to do with value, even more with relationship.<p>There is an awesome book about that. [1] It tells you how to set the right price and the right relationship with a customer. The philosophy is: firstly to show them the value you will provide, secondly to be able to set the right price, and thirdly the fusion of both with the contract. At the end, it is not a question to set an hourly rate and count the hours; it's about how much value you can give them, and set the right price. Then consultants build a contract with rules that reflect that (and protect them).<p>You have a lot of explanation inside with different chapters. It is a must read for me; even just the chapters that explain each ways to set price are a gem. You can easily adapt it to any business.<p>It is also similar to an post on HN some weeks ago. [2]<p>[1] <a href="http://www.amazon.com/Value-Based-Fees-Charge-Youre-Worth/dp/0470275847/ref=sr_1_8?s=books&ie=UTF8&qid=1374792392&sr=1-8&keywords=fees" rel="nofollow">http://www.amazon.com/Value-Based-Fees-Charge-Youre-Worth/dp...</a><p>[2] <a href="http://sixrevisions.com/business/earn-more-on-projects/" rel="nofollow">http://sixrevisions.com/business/earn-more-on-projects/</a>
Charge whatever you can get away with. Set a number and show willingness to walk away.<p>I used to do cloud consulting from an LLC after doing client-facing enterprise AWS consulting.<p>Consulting experience TLDR braindump:<p><pre><code> * Enterprise shops look down on people that don't charge enough.
* Some shops feel entitled to get a bunch of stuff for free. Hold your ground and explain you have bills to pay and can't set a new precedent. Your time is valuable.
* Free assessments are an easy way to determine how much crap and hand-holding you'll have to deal with. It'll also let you show you know what you're talking about and be able to
* Research solutions before raising proposals. Anything you raise will basically be put on you to support.
* Raise prices every year or two. It'll be less of a surprise if it's a fairly regular thing and it's mentioned ahead of time.
* Work on- vs. off-site has +s and -s.
* Work with fun clients that pay on-time and don't do hourly. Hourly is for noobs that take too long. Milestone-based at the same comfortable hourly rate puts the onus on you to always deliver.
* Getting a % of the milestone upfront for a good faith deposit.
* Don't do Net 30 or + ever... Collecting will be a hassle. Net 10 -2%, 15
* Master agreement
* Put milestones in writing to be clear. (Contracts are only as good as the relationships on which they are written.)
* Engage with the highest ranking person you can, and you'll more or less own the place. (Just don't get too cocky, instant hubris.)
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HTH
My rule of thumb is take what you'd expect at a full-time job and divide by 1000. So, if you'd make $130k in salary, charge $130/hr for that work as a freelancer.
In the UK, my lowest rate is equivalent to $75 an hour. I can read and write code, but most of my work is documentation related. I, too, like to tinker around with my own projects, but tend to do that between gigs. I'd be delighted if I could work for 30 hours a week and spend the rest on my own projects.
Here is another issue about not charging enough: clients don't respect you. You are the same exact person at $50/hr versus $500/hr, but a client will bend over backwards to make <i>you</i> happy at $500/hr, whereas they will walk all over you at $50/hr. You need to charge higher rates just to maintain a healthy relationship.
Has anyone ever increased the rate on their existing client by 30%+ before? How did it go?<p>Currently in a situation where a contract was offered to be extended again, but my roles have creeped way outside of coding/documentation into screencasts (which reqd purchasing a better machine + Adobe CS), engineering support, and sales trips in the future.
I'm trying to charge $50 as a designer & developer.
I have many requests from US who are willing to pay this amount but they want me to be there, to meet personally first. Is that a common request or just an elegant way to say bye?
I can't believe people have asked me "how much do you want to make?" when giving me career/contracting guidance. I'm glad somebody else out there recognizes how silly that sounds.