11 ms·

How Much to Charge as a Freelancer

123 points by alipang 13y ago

moron4hire 13y ago
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. 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 want them to get someone else to do that shit. There is no way that stuff helps my long term development. 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. 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? 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.
- deletes 13y ago
  ( fourth paragraph ) Why are you comparing a bad developer from Croatia with a good one from somewhere else( USA I assume ). The situation might as well be reversed, you can't assume someones skill from their geographical location.
  - skilesare 13y ago
    He probably should have said 'the chance of a bad developer from...' If you are local and have references your risk is drastically reduced. Clients pay for that.
  - skilesare 13y ago
    Also, no one talks about their awesome Croatian developer...its like a trade secret. Everyone talks about their horror stories.
  - moron4hire 13y ago
    Allow me to explain: From their geographic location, I can assume that they are likely to charge significantly less than me. From the quality of just plain not being me, I can assume they aren't as good as me. I have yet to have experience prove this assumption wrong. I've worked on projects with other developers in San Diego, Chicago, Miami, Iran, India, Croatia, and many other places. They've all been pretty crappy developers whom I can only imagine lied about their credentials, because I just can't imagine how it is possible they make any software for anyone. The client has eventually fired them all because they realized what a bad deal they were. The only difference between them was the hourly rate they charged, meaning there were often more from India than San Diego.
    - gperetin 13y ago
      Developer from Croatia here :) Yes we do charge less because of our geographic location, but I wouldn't say significantly less, or maybe not at rates you are talking about ($100/hr really isn't that much). That said, I spent 2 months in San Francisco this summer and was able to find a job for higher rate just because I was there. I guess it comes with territory. :)
      - ankitml 13y ago
        Location has heavy influence on prices.. look at other professional services even inside US. Doctors / counselors / lawyers etc.. everyone's prices depends on location. On the other hand you cant say about quality. Ya India has lots of crappy developers, but that is just because there are way to many developers. Good ones dont need to market themselves too much and hence most people would have never heard about them outside their circle of clients.
    - codecool 13y ago
      This assumption is just plain wrong. Those clients just jump on seeing such low rates without checking work first. If one's hiring process is not good then bad hires are bound to happen no matter if the hire is Indian or American.
      - 13y ago
  - maratd 13y ago
    > The situation might as well be reversed, you can't assume someones skill from their geographical location. You most certainly can. I can tell you that the average developer hired from India will have a significantly reduced skillset than one hired in the US. If that's not polite in civilized company, well then, tough. That said, it's largely irrelevant. What's truly relevant are culture differences and you do not want to deal with them. Hire locally. If you're in Croatia, hire in Croatia. If you're in India, hire in India. If you're in the US, hire in the US. The reduced amount of grief and clear communication is worth it. Never-mind that you're in the same timezone as well.
    - jes5199 13y ago
      Yeah. Everyone I know who has had a good experience with an overseas shop has said "of course, we keep one of our employees over there full time working directly with them, which ends up being kind of expensive"
- kayoone 13y ago
  great situation to be in but thats actually not that common
  - moron4hire 13y ago
    I think it's uncommon because most people just aren't very good at programming, but more importantly, most people can't imagine work not working for The Man. I probably work a lot more than most people, once my personal projects are taken into account, but most people wouldn't count that work as legitimate because--for some reason--they only see work-for-pay as legitimate. Maybe it's a vestige of a pseudofeudalistic time in which one measured their worth relative to the worth of their master. "You plow the fields owned by IBM? Well! My lord and master is GOOGLE. He makes your puny duchy look like PeopleSoft. FOR THE EMPIRE!!!"
  - jes5199 13y ago
    My rates are in the same ballpark as the person above, I have a small number of regular clients, I try not to work more than 30 hours a week. I could work more if I wanted to. Instead, I'm working on side-projects that are more fun, and some of them could turn into businesses eventually. My take-home pay is higher than it was working 50+ hours for salary at the hotshot San Francisco success story where I was working last year -- and I don't even have Bay Area clients, at the moment. People in Oregon and Washington are paying me this well.
    - moron4hire 13y ago
      Heh, I had some clients in Oregon for a while.
- hekker 13y ago
  Je verwacht ut nie!
- qwerta 13y ago
  There are 25$/hr developers in US as well. And 'real' developers charge per day :-)
bsimpson 13y ago
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.
- nonchalance 13y ago
  Another formulation of that rule of thumb is double the per-hour salary (equivalent since there are roughly 40 * 50 = 2000 working hours in a year). $130K/yr salary -> $65/hr salary, so you should charge 2 * $65/hr = $130/hr
- wpietri 13y ago
  When clients ask you why, the answer I give is that professional services people typically bill about 1000 hours a year. The rest of the time goes to sales, marketing, learning new tools, and other non-billable work. That said, once you are consistently busy, you should raise your rates, just like the article says. When clients ask you about that rate, just say, "Well, that's what other new clients are paying." Nobody can really argue with that. I've also found a lot of value in having a high headline rate that I discount when I actually want the work.
andy_adams 13y ago
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. 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. 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.
- wpietri 13y ago
  You shouldn't worry too much about "way less than you". Think, for example, about the food you buy. For most people, there are alternatives available that are much cheaper. E.g., you could be buying beans and rice in 10 lb sacks. Or you could be haunting grocery stores for scratch-n-dent sales on generic food. Now think of a specific purchase you made and ask yourself: Why do you pay more than the minimum? What are your motivations, and how do you make your choices? Sometimes price matters a lot, and it always matters a little. But it's rarely the biggest factor in a purchasing decision.
- BSousa 13y ago
  May I ask where you find these firms? I know a lot for on-site contracting, but off-site freelancing I don't seem to find many (specially in UK/Europe)
hanley 13y ago
The Founder & CEO of Freshbooks released a free eBook on this topic. Really quick read and I found it useful. http://breakingthetimebarrier.freshbooks.com/ http://breakingthetimebarrier.freshbooks.com/
- raymondduke 13y ago
  I was inspired by his post and wrote one of my own (http://raymondduke.com/blog/improving-your-copywriter-pricing-strategy http://raymondduke.com/blog/improving-your-copywriter-pricin...). His (free) eBook is sitting on my Google Drive. I should get to reading it soon.
  - hanley 13y ago
    IIRC it only took me an hour or two to read the book.
ropz 13y ago
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.
- tjr 13y ago
  Do you have any tips on finding freelance work doing documentation?
  - moron4hire 13y ago
    For finding any kind of freelance work: make lots of friends. The online clearinghouse sites are a great way to end up doing too much work for too little pay for a shitty client. Everyone needs work done or know someone who needs work done. Work the networking. And I mean friends. You're not going to get business out of a guy you just met. You're probably not going to get business out of many people the first time they ask you. Never ask them if they have work they need done, let them complain about not being able to find someone, then mention you do that sort of work (whatever it is, if you're smart you can figure it out well enough to do better than the majority of people). Don't back down on rate, they might balk at first, but when things get dire for them and they still can't find anyone, they'll remember you. Avoid debt like the plague. It'll make you a slave to a constant, regular income. I have constant, regular income, but I also know I have urges to take 3 months off at a time. Debt is the mind killer. It's a lot easier to face the prospect of losing a contract when you know you have 3 months before you need more money, not 1 week. EDIT: and definitely lie to your in-laws about how much you work. A) Few people my own generation can get over "not having a good job", fewer still of the older ones. And B) they might think not working for a cluent means you're not busy and they can make demands of your time.
    - pyoung 13y ago
      How long did it take you to land your first gig? This definitely seems like the way to go, but as you can imagine there is a heavy amount of luck involved with your process (i.e. if all of your friends are not associated with companies that need your skills, then you probably aren't going to find many offers). I am currently on a sabbatical of sorts, and am keeping the option of doing freelance work as a way to extend it, but so far, all of the 'dude, this would be great for you' opportunities from friends haven't panned out. Part of the problem might be that I don't really need the work, so I haven't been following up too aggressively, but it still feels like I would probably have to go outside my network to land the first gig.
lifeisstillgood 13y ago
A small suggestion (and boy I do not have this all figured out yet) 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. This is good for several reasons It ties the billing cycle to a feature a client wants instead of to your time which they could care less about. 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) 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 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) 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. Then raise your secret hourly rate, and features just get more expensive. Instead of arguments about hourly rates and full time salaries
- wikwocket 13y ago
  I like this approach; the other reason it is good is that when the client sees the proposal, they get choices. They can see the breakdown, see which feature costs how much, and customize how they want it. This involves the client more, making it more of their project, and also it changes the dialogue from "Should I hire them?" to "Which features should I hire them to do?" The only thing I would change is that your expected time per feature times your hourly rate is the floor cost of each feature. Be aware of your costs but do not charge solely based on them. If feature X is a huge win for the client but is easy for you (due to your years of experience, built-up tech-stack, or home-built tools), don't give it away for peanuts!
  - lifeisstillgood 13y ago
    Yes it makes it very easy to shift features around to get a decent spread of easy and hard in a week / iteration. It's also useful to have a check - more than a three day estimate basically means its too big - redo the press release As for the floor cost - maybe. You still need to keep your feet on the ground at some point so increasing your rates and multiplying up is a fine approach. When you have an obvious winner go for much bigger rewards - but not everytime
csbartus 13y ago
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?
- rdouble 13y ago
  It's common but sort of an indicator of a project that is going to suck. There are outsourcing firms in the USA who are staffed entirely by remote workers and pay $50-$65 an hour.
  - rorrr2 13y ago
    And charge the client $100-300/hr.
    - jes5199 13y ago
      That might still be worth it for everyone involved. The process of vetting good engineers and designers from overseas is very difficult, and potentially very expensive
      - rorrr2 13y ago
        In my experience the middle man (recruiting company) rarely gives a crap about the quality of workers, as long as the client is paying for the ones they find.
- charlietran 13y ago
  Very common. You should charge more.
- jes5199 13y ago
  How much would you have to charge to be able to fly to the USA every 2 months and meet with clients?
  - 13y ago
tptacek 13y ago
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. I'm not sure I've ever talked to someone who moved from hourly to daily and regretted doing so.
- wpietri 13y ago
  I agree in general, but I think it depends on the kind of work you're doing. Right now I'm doing some actual consulting (in contrast to contract work), and being available by the hour has been helpful. I turn up at a couple of regular meetings; when some issue comes up that I can help with, I help. On a day rate, the expense is large enough that people only want to call you in when there's something they perceive as big and serious. But when it's just time worked, they're happy to grab you for a short chat. Which often turns into something larger. And it makes it easy to leave the contract open; I've been doing this with one client for circa 6 months. That has let me influence them a lot more than a short burst of days would have done.
  - tptacek 13y ago
    Because you're not a furniture mover. Hourly rates: * Make it harder to negotiate good rates: https://news.ycombinator.com/item?id=3420782 https://news.ycombinator.com/item?id=3420782 * Are a pernicious drag on your client relationships: https://news.ycombinator.com/item?id=4103417 https://news.ycombinator.com/item?id=4103417 * Deprive you of opportunities to do lightweight things for free without setting weird expectations: https://news.ycombinator.com/item?id=4102639 https://news.ycombinator.com/item?id=4102639 * Obscure the actual value you're providing to clients, which isn't simply getting technical things done: https://news.ycombinator.com/item?id=4103207 https://news.ycombinator.com/item?id=4103207 * Are part of the difference between transactional contracting and consulting: https://news.ycombinator.com/item?id=2909923 https://news.ycombinator.com/item?id=2909923
- bezidejni 13y ago
  How many hours per day would you have to work to charge a daily rate? 2? 4? 8?
nazka 13y ago
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. 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). 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. It is also similar to an post on HN some weeks ago. [2] [1] 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 http://www.amazon.com/Value-Based-Fees-Charge-Youre-Worth/dp... [2] http://sixrevisions.com/business/earn-more-on-projects/ http://sixrevisions.com/business/earn-more-on-projects/
elclanrs 13y ago
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: ---- 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 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. 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. This has been working for me over the years. Clients seem happy with the process.
- porker 13y ago
  > * Maintenance 24/7 A word of advice. Never, ever set yourself up for this if you're a solo freelancer, unless there's 3 of you (or at a pinch 2). The time the client needs this will be when you're a) on an airplane b) in bed with the flu c) on holiday d) having a romantic evening/weekend with your other half. Nice money and the client likes it, but you have signed away your entire life in exchange.
  - elclanrs 13y ago
    Maintenance is a monthly fee, forgot to mention that. Sometimes clients do call in unfortunate situations, but they pay for that privilege. All additional services are opt-in.
maaku 13y ago
As much as your client is willing to pay, and no more.
orblivion 13y ago
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.
ballard 13y ago
Charge whatever you can get away with. Set a number and show willingness to walk away. I used to do cloud consulting from an LLC after doing client-facing enterprise AWS consulting. Consulting experience TLDR braindump: * 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.) HTH
moron4hire 13y ago
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 you 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.
seltzered_ 13y ago
Has anyone ever increased the rate on their existing client by 30%+ before? How did it go? 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.
- phpnode 13y ago
  yes. just make sure you have another client ready to pay your current rate + X% and use that as leverage to increase your rate for your existing client to current rate + X% + Y%

123 points by alipang 13y ago

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. 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 want them to get someone else to do that shit. There is no way that stuff helps my long term development. 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. 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? 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.

deletes 13y ago
( fourth paragraph ) Why are you comparing a bad developer from Croatia with a good one from somewhere else( USA I assume ). The situation might as well be reversed, you can't assume someones skill from their geographical location.
- skilesare 13y ago
  He probably should have said 'the chance of a bad developer from...' If you are local and have references your risk is drastically reduced. Clients pay for that.
- skilesare 13y ago
  Also, no one talks about their awesome Croatian developer...its like a trade secret. Everyone talks about their horror stories.
- moron4hire 13y ago
  Allow me to explain: From their geographic location, I can assume that they are likely to charge significantly less than me. From the quality of just plain not being me, I can assume they aren't as good as me. I have yet to have experience prove this assumption wrong. I've worked on projects with other developers in San Diego, Chicago, Miami, Iran, India, Croatia, and many other places. They've all been pretty crappy developers whom I can only imagine lied about their credentials, because I just can't imagine how it is possible they make any software for anyone. The client has eventually fired them all because they realized what a bad deal they were. The only difference between them was the hourly rate they charged, meaning there were often more from India than San Diego.
  - gperetin 13y ago
    Developer from Croatia here :) Yes we do charge less because of our geographic location, but I wouldn't say significantly less, or maybe not at rates you are talking about ($100/hr really isn't that much). That said, I spent 2 months in San Francisco this summer and was able to find a job for higher rate just because I was there. I guess it comes with territory. :)
    - ankitml 13y ago
      Location has heavy influence on prices.. look at other professional services even inside US. Doctors / counselors / lawyers etc.. everyone's prices depends on location. On the other hand you cant say about quality. Ya India has lots of crappy developers, but that is just because there are way to many developers. Good ones dont need to market themselves too much and hence most people would have never heard about them outside their circle of clients.
  - codecool 13y ago
    This assumption is just plain wrong. Those clients just jump on seeing such low rates without checking work first. If one's hiring process is not good then bad hires are bound to happen no matter if the hire is Indian or American.
    - 13y ago
- maratd 13y ago
  > The situation might as well be reversed, you can't assume someones skill from their geographical location. You most certainly can. I can tell you that the average developer hired from India will have a significantly reduced skillset than one hired in the US. If that's not polite in civilized company, well then, tough. That said, it's largely irrelevant. What's truly relevant are culture differences and you do not want to deal with them. Hire locally. If you're in Croatia, hire in Croatia. If you're in India, hire in India. If you're in the US, hire in the US. The reduced amount of grief and clear communication is worth it. Never-mind that you're in the same timezone as well.
  - jes5199 13y ago
    Yeah. Everyone I know who has had a good experience with an overseas shop has said "of course, we keep one of our employees over there full time working directly with them, which ends up being kind of expensive"
kayoone 13y ago
great situation to be in but thats actually not that common
- moron4hire 13y ago
  I think it's uncommon because most people just aren't very good at programming, but more importantly, most people can't imagine work not working for The Man. I probably work a lot more than most people, once my personal projects are taken into account, but most people wouldn't count that work as legitimate because--for some reason--they only see work-for-pay as legitimate. Maybe it's a vestige of a pseudofeudalistic time in which one measured their worth relative to the worth of their master. "You plow the fields owned by IBM? Well! My lord and master is GOOGLE. He makes your puny duchy look like PeopleSoft. FOR THE EMPIRE!!!"
- jes5199 13y ago
  My rates are in the same ballpark as the person above, I have a small number of regular clients, I try not to work more than 30 hours a week. I could work more if I wanted to. Instead, I'm working on side-projects that are more fun, and some of them could turn into businesses eventually. My take-home pay is higher than it was working 50+ hours for salary at the hotshot San Francisco success story where I was working last year -- and I don't even have Bay Area clients, at the moment. People in Oregon and Washington are paying me this well.
  - moron4hire 13y ago
    Heh, I had some clients in Oregon for a while.
hekker 13y ago
Je verwacht ut nie!
qwerta 13y ago
There are 25$/hr developers in US as well. And 'real' developers charge per day :-)

bsimpson 13y ago

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.

nonchalance 13y ago
Another formulation of that rule of thumb is double the per-hour salary (equivalent since there are roughly 40 * 50 = 2000 working hours in a year). $130K/yr salary -> $65/hr salary, so you should charge 2 * $65/hr = $130/hr
wpietri 13y ago
When clients ask you why, the answer I give is that professional services people typically bill about 1000 hours a year. The rest of the time goes to sales, marketing, learning new tools, and other non-billable work. That said, once you are consistently busy, you should raise your rates, just like the article says. When clients ask you about that rate, just say, "Well, that's what other new clients are paying." Nobody can really argue with that. I've also found a lot of value in having a high headline rate that I discount when I actually want the work.

andy_adams 13y ago

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. 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. 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.

wpietri 13y ago
You shouldn't worry too much about "way less than you". Think, for example, about the food you buy. For most people, there are alternatives available that are much cheaper. E.g., you could be buying beans and rice in 10 lb sacks. Or you could be haunting grocery stores for scratch-n-dent sales on generic food. Now think of a specific purchase you made and ask yourself: Why do you pay more than the minimum? What are your motivations, and how do you make your choices? Sometimes price matters a lot, and it always matters a little. But it's rarely the biggest factor in a purchasing decision.
BSousa 13y ago
May I ask where you find these firms? I know a lot for on-site contracting, but off-site freelancing I don't seem to find many (specially in UK/Europe)

hanley 13y ago

The Founder & CEO of Freshbooks released a free eBook on this topic. Really quick read and I found it useful. http://breakingthetimebarrier.freshbooks.com/ http://breakingthetimebarrier.freshbooks.com/

raymondduke 13y ago
I was inspired by his post and wrote one of my own (http://raymondduke.com/blog/improving-your-copywriter-pricing-strategy http://raymondduke.com/blog/improving-your-copywriter-pricin...). His (free) eBook is sitting on my Google Drive. I should get to reading it soon.
- hanley 13y ago
  IIRC it only took me an hour or two to read the book.

ropz 13y ago

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.

tjr 13y ago
Do you have any tips on finding freelance work doing documentation?
- moron4hire 13y ago
  For finding any kind of freelance work: make lots of friends. The online clearinghouse sites are a great way to end up doing too much work for too little pay for a shitty client. Everyone needs work done or know someone who needs work done. Work the networking. And I mean friends. You're not going to get business out of a guy you just met. You're probably not going to get business out of many people the first time they ask you. Never ask them if they have work they need done, let them complain about not being able to find someone, then mention you do that sort of work (whatever it is, if you're smart you can figure it out well enough to do better than the majority of people). Don't back down on rate, they might balk at first, but when things get dire for them and they still can't find anyone, they'll remember you. Avoid debt like the plague. It'll make you a slave to a constant, regular income. I have constant, regular income, but I also know I have urges to take 3 months off at a time. Debt is the mind killer. It's a lot easier to face the prospect of losing a contract when you know you have 3 months before you need more money, not 1 week. EDIT: and definitely lie to your in-laws about how much you work. A) Few people my own generation can get over "not having a good job", fewer still of the older ones. And B) they might think not working for a cluent means you're not busy and they can make demands of your time.
  - pyoung 13y ago
    How long did it take you to land your first gig? This definitely seems like the way to go, but as you can imagine there is a heavy amount of luck involved with your process (i.e. if all of your friends are not associated with companies that need your skills, then you probably aren't going to find many offers). I am currently on a sabbatical of sorts, and am keeping the option of doing freelance work as a way to extend it, but so far, all of the 'dude, this would be great for you' opportunities from friends haven't panned out. Part of the problem might be that I don't really need the work, so I haven't been following up too aggressively, but it still feels like I would probably have to go outside my network to land the first gig.

lifeisstillgood 13y ago

A small suggestion (and boy I do not have this all figured out yet) 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. This is good for several reasons It ties the billing cycle to a feature a client wants instead of to your time which they could care less about. 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) 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 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) 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. Then raise your secret hourly rate, and features just get more expensive. Instead of arguments about hourly rates and full time salaries

wikwocket 13y ago
I like this approach; the other reason it is good is that when the client sees the proposal, they get choices. They can see the breakdown, see which feature costs how much, and customize how they want it. This involves the client more, making it more of their project, and also it changes the dialogue from "Should I hire them?" to "Which features should I hire them to do?" The only thing I would change is that your expected time per feature times your hourly rate is the floor cost of each feature. Be aware of your costs but do not charge solely based on them. If feature X is a huge win for the client but is easy for you (due to your years of experience, built-up tech-stack, or home-built tools), don't give it away for peanuts!
- lifeisstillgood 13y ago
  Yes it makes it very easy to shift features around to get a decent spread of easy and hard in a week / iteration. It's also useful to have a check - more than a three day estimate basically means its too big - redo the press release As for the floor cost - maybe. You still need to keep your feet on the ground at some point so increasing your rates and multiplying up is a fine approach. When you have an obvious winner go for much bigger rewards - but not everytime

csbartus 13y ago

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?

rdouble 13y ago
It's common but sort of an indicator of a project that is going to suck. There are outsourcing firms in the USA who are staffed entirely by remote workers and pay $50-$65 an hour.
- rorrr2 13y ago
  And charge the client $100-300/hr.
  - jes5199 13y ago
    That might still be worth it for everyone involved. The process of vetting good engineers and designers from overseas is very difficult, and potentially very expensive
    - rorrr2 13y ago
      In my experience the middle man (recruiting company) rarely gives a crap about the quality of workers, as long as the client is paying for the ones they find.
charlietran 13y ago
Very common. You should charge more.
jes5199 13y ago
How much would you have to charge to be able to fly to the USA every 2 months and meet with clients?
- 13y ago

tptacek 13y ago

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. I'm not sure I've ever talked to someone who moved from hourly to daily and regretted doing so.

wpietri 13y ago
I agree in general, but I think it depends on the kind of work you're doing. Right now I'm doing some actual consulting (in contrast to contract work), and being available by the hour has been helpful. I turn up at a couple of regular meetings; when some issue comes up that I can help with, I help. On a day rate, the expense is large enough that people only want to call you in when there's something they perceive as big and serious. But when it's just time worked, they're happy to grab you for a short chat. Which often turns into something larger. And it makes it easy to leave the contract open; I've been doing this with one client for circa 6 months. That has let me influence them a lot more than a short burst of days would have done.
- tptacek 13y ago
  Because you're not a furniture mover. Hourly rates: * Make it harder to negotiate good rates: https://news.ycombinator.com/item?id=3420782 https://news.ycombinator.com/item?id=3420782 * Are a pernicious drag on your client relationships: https://news.ycombinator.com/item?id=4103417 https://news.ycombinator.com/item?id=4103417 * Deprive you of opportunities to do lightweight things for free without setting weird expectations: https://news.ycombinator.com/item?id=4102639 https://news.ycombinator.com/item?id=4102639 * Obscure the actual value you're providing to clients, which isn't simply getting technical things done: https://news.ycombinator.com/item?id=4103207 https://news.ycombinator.com/item?id=4103207 * Are part of the difference between transactional contracting and consulting: https://news.ycombinator.com/item?id=2909923 https://news.ycombinator.com/item?id=2909923
bezidejni 13y ago
How many hours per day would you have to work to charge a daily rate? 2? 4? 8?

nazka 13y ago

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. 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). 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. It is also similar to an post on HN some weeks ago. [2] [1] 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 http://www.amazon.com/Value-Based-Fees-Charge-Youre-Worth/dp... [2] http://sixrevisions.com/business/earn-more-on-projects/ http://sixrevisions.com/business/earn-more-on-projects/

elclanrs 13y ago

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: ---- 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 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. 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. This has been working for me over the years. Clients seem happy with the process.

porker 13y ago
> * Maintenance 24/7 A word of advice. Never, ever set yourself up for this if you're a solo freelancer, unless there's 3 of you (or at a pinch 2). The time the client needs this will be when you're a) on an airplane b) in bed with the flu c) on holiday d) having a romantic evening/weekend with your other half. Nice money and the client likes it, but you have signed away your entire life in exchange.
- elclanrs 13y ago
  Maintenance is a monthly fee, forgot to mention that. Sometimes clients do call in unfortunate situations, but they pay for that privilege. All additional services are opt-in.

maaku 13y ago

As much as your client is willing to pay, and no more.

orblivion 13y ago

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.

ballard 13y ago

Charge whatever you can get away with. Set a number and show willingness to walk away. I used to do cloud consulting from an LLC after doing client-facing enterprise AWS consulting. Consulting experience TLDR braindump: * 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.) HTH

moron4hire 13y ago

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 you 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.

seltzered_ 13y ago

Has anyone ever increased the rate on their existing client by 30%+ before? How did it go? 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.

phpnode 13y ago
yes. just make sure you have another client ready to pay your current rate + X% and use that as leverage to increase your rate for your existing client to current rate + X% + Y%