8 ms·

Do you mean 'quoting' daily, or 'billing' daily? There is a major difference. The main one being that if 'bill daily' you are putting a burden on your client t

Do you mean 'quoting' daily, or 'billing' daily? There is a major difference. The main one being that if 'bill daily' you are putting a burden on your client to have to think about paying you every single day. At some point, it becomes annoying. Thoughts?

tptacek 14y ago
I just mean don't have an hourly rate.
- marcamillion 14y ago
  I see. How does this compare to just doing flat-rate quotes? I guess my aversion to even quoting daily, is the notion that you can be brought up to speed quickly enough to effect any good change (and add value) in just 1 day. For instance, if you are supposed to be optimizing code in a legacy web app - do you set a minimum number of days that they have to commit to, for something like this? Or do you just stick to daily?
  - tptacek 14y ago
    I have no problem with flat rate quotes. I only have a problem with quotes broken into abillable hours. My general M.O. with project quotes, which someone on HN once called "the first truly new, clever billing technique that I've seen" but I just call "the way Dave and Jeremy were writing proposals and statements of work when we started Matasano", is simple: * Make a conservative, honest estimate of the total number of billable days/weeks required to complete the project. * Quote the total amount that time works out to as if it was a project rate. * Clearly state in the SOW that if additional time is required beyond the quoted amount, additional person/days can be staffed at a pro-rata daily rate. The result is a project-based quote on time-and-materials terms.
    - notJim 14y ago
      > * Clearly state in the SOW that if additional time is required beyond the quoted amount, additional person/days can be staffed at a pro-rata daily rate. I (and I imagine a bunch of other people) am curious about this point. I worked at a previous company that ostensibly had terms like this, but it never worked out, because in practice the clients almost always bullied my bosses into giving them the extra work for free, because people don't like cost overruns. Did you guys find that you had a lot of resistance when it came to overrages?
      - tptacek 14y ago
        We've been doing this since holy shit I'm old. Overages (and underages) are very rare. I'm sure I've given more days back than I've ever asked for in additional time. The thing that normally happens is, you're attentive to your project, you see schedule problems coming a week or two away, you make it very clear to your point of contact that there's a storm brewing on the GANNT chart horizon, and then you adjust project scope to account for it; this is the consulting version of "slipping features, not the date".
    - ErrantX 14y ago
      You're thinking large scale projects & clients here, though. For smaller scale work and titchy clients (a massive marketplace where some of the most successful consultants I know operate), "daily rate" just doesn't work (YMMV). Neither does fixed price, really. I spent a period charging daily and half day rates based on the advice of someone else - it was a pain for me more than anything. I spent more time asserting to clients that this was better for them than actually pitching for the work :) (bear in mind that for small scale projects the client is probably unused to the traditional consultancy models, at least in my experience). As an individual developer, if someone is asking me for less than 6 hours worth of work a month it is better for me (in terms of scheduling, justifying my timescales and actually obtaining work) to bill hourly. I've tried various methods of billing and hourly has always resulted in the most work, less stress and highest revenue. But, obviously, this is only as an individual. Many people poo poo such bit-part clients - but they have always been my most reliable revenue stream; in terms of follow on work and referrals. Larger more consultancy minded clients (billed daily) hardly ever end up with follow up and are way more aggressive in obtaining completion. But as with all things YMMV; most of the developer consultants I know have their own individual viewpoint (and we're all fairly evenly successful).
      - tptacek 14y ago
        The industry standard project in my field is 2 people, 2 weeks. We do one-week projects, we do sub-week projects, and we do multi-month projects, but the modal project staffing is 4 person-weeks. These aren't huge projects. We work with as many startups as we do with large financial companies. I'm having a hard time understanding how a simple daily rate causes you more stress. Why were you discussing with your clients how a "daily rate was better for them"? It's perfectly OK for the daily rate to be better for you, full stop. If your dealflow is dominated by a few recurring clients, you should consider whether you have something more analogous to a retainer or staff-aug arrangement than a true project model. What makes me nervous is the overwhelmingly obvious fact that nerds like us are all too happy to leave money on the table. "It's stressful for me personally to effectively receive 8x$hourly instead of breaking out precisely how many hours I worked so I can justify 6x$hourly with the client without arguing". Well, you just left a new iPad on the table; if your clients are forcing you to do this because they are fucking assholes, then get better clients. It is a seller's market right now.
patio11 14y ago
Quoted daily ("Work is on a time and materials basis. Rate: $2,000 per day."). Invoices will typically cover a few weeks of work, depending on the tempo of your engagements, your relationship with a customer, etc.
- ams6110 14y ago
  This has to be regionally dependent. Around here there is no way you would get $2,000 day for web development. Best I have ever gotten is half that, for a one-day "emergency" engagement (i.e. drop everything and help me).
  - patio11 14y ago
    I just plucked a number out of the air, rather than picking a number which I felt was representative of web development. Also, I've harped on this a time or two, but there are people who get $2,000 a day for something which is indistinguishable from web development in terms of activities performed but which is sold as accomplishing business goals ("making lots of money") with incidental reference to programming. P.S. Charge more for emergency engagements. The business stopping for a day is worth more than $1,000 even if the business is a taco truck. Don't do professional work for taco trucks.
    - Alan01252 14y ago
      patio11, I'd like to say much of my stance on negotiating rates with people has come directly from reading comments you've made on hacker news in the past. Thank you! If anything I still think I'm too lenient but this I'm sure will grow as my confidence dealing with clients grows.
    - gaius 14y ago
      indistinguishable from web development in terms of activities performed You're over-discounting domain knowledge. Anyone can write in code x+y. It might take much deeper knowledge to know that sometimes, it's x-y, and exactly when that is.
  - 14y ago

tptacek 14y ago

I just mean don't have an hourly rate.

marcamillion 14y ago
I see. How does this compare to just doing flat-rate quotes? I guess my aversion to even quoting daily, is the notion that you can be brought up to speed quickly enough to effect any good change (and add value) in just 1 day. For instance, if you are supposed to be optimizing code in a legacy web app - do you set a minimum number of days that they have to commit to, for something like this? Or do you just stick to daily?
- tptacek 14y ago
  I have no problem with flat rate quotes. I only have a problem with quotes broken into abillable hours. My general M.O. with project quotes, which someone on HN once called "the first truly new, clever billing technique that I've seen" but I just call "the way Dave and Jeremy were writing proposals and statements of work when we started Matasano", is simple: * Make a conservative, honest estimate of the total number of billable days/weeks required to complete the project. * Quote the total amount that time works out to as if it was a project rate. * Clearly state in the SOW that if additional time is required beyond the quoted amount, additional person/days can be staffed at a pro-rata daily rate. The result is a project-based quote on time-and-materials terms.
  - notJim 14y ago
    > * Clearly state in the SOW that if additional time is required beyond the quoted amount, additional person/days can be staffed at a pro-rata daily rate. I (and I imagine a bunch of other people) am curious about this point. I worked at a previous company that ostensibly had terms like this, but it never worked out, because in practice the clients almost always bullied my bosses into giving them the extra work for free, because people don't like cost overruns. Did you guys find that you had a lot of resistance when it came to overrages?
    - tptacek 14y ago
      We've been doing this since holy shit I'm old. Overages (and underages) are very rare. I'm sure I've given more days back than I've ever asked for in additional time. The thing that normally happens is, you're attentive to your project, you see schedule problems coming a week or two away, you make it very clear to your point of contact that there's a storm brewing on the GANNT chart horizon, and then you adjust project scope to account for it; this is the consulting version of "slipping features, not the date".
  - ErrantX 14y ago
    You're thinking large scale projects & clients here, though. For smaller scale work and titchy clients (a massive marketplace where some of the most successful consultants I know operate), "daily rate" just doesn't work (YMMV). Neither does fixed price, really. I spent a period charging daily and half day rates based on the advice of someone else - it was a pain for me more than anything. I spent more time asserting to clients that this was better for them than actually pitching for the work :) (bear in mind that for small scale projects the client is probably unused to the traditional consultancy models, at least in my experience). As an individual developer, if someone is asking me for less than 6 hours worth of work a month it is better for me (in terms of scheduling, justifying my timescales and actually obtaining work) to bill hourly. I've tried various methods of billing and hourly has always resulted in the most work, less stress and highest revenue. But, obviously, this is only as an individual. Many people poo poo such bit-part clients - but they have always been my most reliable revenue stream; in terms of follow on work and referrals. Larger more consultancy minded clients (billed daily) hardly ever end up with follow up and are way more aggressive in obtaining completion. But as with all things YMMV; most of the developer consultants I know have their own individual viewpoint (and we're all fairly evenly successful).
    - tptacek 14y ago
      The industry standard project in my field is 2 people, 2 weeks. We do one-week projects, we do sub-week projects, and we do multi-month projects, but the modal project staffing is 4 person-weeks. These aren't huge projects. We work with as many startups as we do with large financial companies. I'm having a hard time understanding how a simple daily rate causes you more stress. Why were you discussing with your clients how a "daily rate was better for them"? It's perfectly OK for the daily rate to be better for you, full stop. If your dealflow is dominated by a few recurring clients, you should consider whether you have something more analogous to a retainer or staff-aug arrangement than a true project model. What makes me nervous is the overwhelmingly obvious fact that nerds like us are all too happy to leave money on the table. "It's stressful for me personally to effectively receive 8x$hourly instead of breaking out precisely how many hours I worked so I can justify 6x$hourly with the client without arguing". Well, you just left a new iPad on the table; if your clients are forcing you to do this because they are fucking assholes, then get better clients. It is a seller's market right now.

patio11 14y ago

Quoted daily ("Work is on a time and materials basis. Rate: $2,000 per day."). Invoices will typically cover a few weeks of work, depending on the tempo of your engagements, your relationship with a customer, etc.

ams6110 14y ago
This has to be regionally dependent. Around here there is no way you would get $2,000 day for web development. Best I have ever gotten is half that, for a one-day "emergency" engagement (i.e. drop everything and help me).
- patio11 14y ago
  I just plucked a number out of the air, rather than picking a number which I felt was representative of web development. Also, I've harped on this a time or two, but there are people who get $2,000 a day for something which is indistinguishable from web development in terms of activities performed but which is sold as accomplishing business goals ("making lots of money") with incidental reference to programming. P.S. Charge more for emergency engagements. The business stopping for a day is worth more than $1,000 even if the business is a taco truck. Don't do professional work for taco trucks.
  - Alan01252 14y ago
    patio11, I'd like to say much of my stance on negotiating rates with people has come directly from reading comments you've made on hacker news in the past. Thank you! If anything I still think I'm too lenient but this I'm sure will grow as my confidence dealing with clients grows.
  - gaius 14y ago
    indistinguishable from web development in terms of activities performed You're over-discounting domain knowledge. Anyone can write in code x+y. It might take much deeper knowledge to know that sometimes, it's x-y, and exactly when that is.
- 14y ago